NEW YORK -- Merrill Lynch & Co. was fined $13.5 million by the states of New Jersey and Connecticut and by the New York Stock Exchange, after a group of the company's brokers engaged in improper market-timing of mutual funds, regulators said yesterday.
The NYSE said it determined brokers in Fort Lee, N.J., made more than 3,700 short-term mutual fund transactions from January through April 2002. The brokers used multiple accounts, all of which were held for a single hedge fund client, the NYSE said. According to the New Jersey attorney general's office, Millennium Partners L.P. was the hedge fund.
Violations continued through October 2003, with the traders involved hiding their transactions from Merrill Lynch, the exchange said. Merrill Lynch told the brokers to stop the trades in November 2002, but the brokers did not, the NYSE said.
Merrill Lynch agreed to the fine and a censure without admitting or denying guilt. The company said three brokers had been fired. A Millennium spokesman said it would have no comment.