Massachusetts’ top securities regulator, Secretary of the Commonwealth Bill Galvin, is investigating Prudential Securities’ Boston office for illegal mutual fund trading, Reuters reports. A spokesman for Galvin’s office would not say whether the investigation involves other fund companies or provide any further details.

The investigation comes on the heels of Galvin’s proceedings against Morgan Stanley last month for providing its brokers with higher commissions and bonuses to sell in-house funds and funds of partner firms (see MME 8/18/03). The state believes these sales tactics earned Morgan $5 million to $8 million in commissions this year alone. In a statement, Galvin compared Morgan Stanley's sales practices to those of used-car salesmen.

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