New Jersey regulators on Tuesday revoked the licenses of three former Merrill Lynch brokers accused of fraud for conspiring with a hedge fund to make tens of thousands of market timing trades.

Peter Harvey, the attorney general, also filed a complaint seeking monetary penalties from the trio known as the "CBS Group", which consisted of Christopher Chung of Edgewater, N.J., Kevin Brunnock of Fort Lee, N.J., and William Savino, also of Fort Lee.

"These financial advisers devised scheme after scheme to hide their conduct and defraud mutual funds and fund investors," Harvey said, in a release.

The revocations come just one week after Merrill agreed to pay $10 million to New Jersey and $3.5 million to Connecticut to settle charges that it failed to supervise the three brokers who engaged in abusive trading practices. It also agreed to adopt a series of oversight reforms.

More than one-third of the trades were made in mutual funds held as sub-accounts of variable annuity contracts purchased for hedge fund Millennium Partners. The advisers placed 12,457 trades on behalf of Millennium in at least 521 mutual funds and 63 mutual fund sub-accounts of at least 40 variable annuities.

In order to disguise their inappropriate trades, the advisers used multiple accounts, under-the-table agreements and other shady methods. Among the funds that reaped a profit for Millennium, gains totaled roughly $60 million.

Merrill fired the three financial advisers in October 2003 and fined their supervisors after repeated warnings to curb their behavior. However, regulators ultimately determined that Merrill did not do enough to enforce its timing policies, discipline its employees and prevent harm to shareholders.

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