In early 2002, executives at Dreyfus gave written permission for the hedge fund Millennium Partners to engage in market timing in its mutual funds, according to the Wall Street Journal.

The authorization, which conflicts with earlier statements from Dreyfus leadership, was uncovered in the testimony of former employees of Merrill Lynch who managed the deal while they were with UBS in 2001.

A spokesperson at Dreyfus in New York refused to comment on the testimony, according to The Journal.

"It would be inappropriate for us to speculate on the contents of testimony or internal UBS/PaineWebber documents that we have never seen, particularly in the context of ongoing proceedings to which we are not a party."

The market timing permission was allegedly given to brokers Christopher Chung, Kevin Brunock and William Savino, who are currently embroiled in a lawsuit over their dismissal from Merrill, which was based partly on their relations with Millennium.

They deny any wrongdoing and argue that the funds gave them permission to market time. Spreadsheets outlining mutual funds that were allowing market timing to occur was entered as evidence in the brokers' case against Merrill and would seem to further affirm Dreyfus' willingness. A series of correspondences would also seem to implicate Dreyfus management.

"Due to the size of these funds we do not feel at this time they are disruptive to our portfolio managers," wrote Michael Millard, then a vice chairman at Dreyfus. He added, "We reserve the right to terminate this agreement at any time with no notice."

Millard also repeated several times that Dreyfus was "aware of the type" of business done by the brokers.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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