Amid the recent rise in popularity of complex mutual funds and ETFs, SEC member Kara Stein is "concerned that we are starting to see some cracks in the foundation" of what she says is an outdated regulatory regime. The Democratic member says the products, which use large amounts of leverage, invest in illiquid securities or execute strategies similar to those utilized by hedge funds, could be putting retail investors at risk. Stein's comments, made at a Brookings Institution event, come as the SEC and other federal regulators are more closely scrutinizing the asset management sector to assess whether certain products or activities could pose risks. Related News: Regulators' odd focus on funds could end badly for investors - Morningstar
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