Market-timing woes continue to pervade the mutual fund industry, as even smaller shops are getting caught in the act.

Fremont Investment Advisors (FIA) on Thursday agreed to a $4.146 million settlement with state and federal regulators over allegations that the company allowed preferred clients to engage in inappropriate market-timing and illegal late-trading of its mutual funds. The San Francisco-based firm manages 12 mutual funds with a total of $3 billion in assets under management, which illustrates a new wrinkle to the scandal in that most of the firms that have been involved thus far have been large fund complexes.

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