Bear Stearns is reportedly investigating whether top executives in its private-client brokerage unit approved improper mutual fund trades. According to internal documents, Bear Stearns is examining e-mails from 109 of its employees, including several firm executives. Included in that group are the heads of the private client group, Steve Dantus and Vincent Dicks. In addition, the New York Stock Exchange has asked the duo for statements.

In its internal investigation, Bear Stearns is seeking the details of trades by dozens of clients to determine whether or not top executives were aware of or approved the market-timing trades. Notorious hedge fund Canary Capital placed its timing trades through brokers, including Bear Stearns.

The e-mail communications by the 109 employees are being scoured for names of brokers, mutual funds and hedge funds that might raise red flags. Also, names of banks and other legal terms and phrases are being screened. The firm is looking for evidence that its employees disguised customer accounts in order to circumvent mutual fund firms' attempts to stop market-timing trades. In particular, Bear Stearns lawyers are looking for complaints from fund companies about inappropriate trading activity.

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