In the last year, many smaller fund firms have simply shut down their own Internet funds and returned what money was left to shareholders.

For established fund firms that want to project a more sober image, inventive marketing has proved a major challenge.

The number of hedge fund firms has also grown - to 3,307 last year, up 74 percent from 1,903 in 1999.

This, they say, proves that fund firms were asleep at the wheel.

Thomas F. Marsico departed in 1997 to start his own mutual fund firm.

Nonetheless, Janus continues to be the best-selling mutual fund firm in the industry.

Some fund firms already appear to be feeling the effects of the investigation.

A hedge fund firm he helped found, Fairfield Partners, suffered some rough months during the bear market of the early 1970's.

After all, the company, noted for its big bets on technology stocks, has arguably been the mutual fund firm to profit most from the bull market.

Both companies generally charge fund firms 0.35 percent a year in servicing fees.