Charles Schwab & Co. agreed last Tuesday to pay $350,000 to settle charges that it improperly permitted investment advisor customers to alter mutual fund orders after the closing bell.

The San Francisco-based broker/dealer is accused of allowing customers that had their pre-close orders rejected, to buy into alternate funds after the market close, yet still receive that day's price. Fund orders received after the 4 p.m. Eastern close are supposed to receive the next day's price. Schwab says the original orders, which were all submitted prior to the market's close, were rejected by the firm's electronic trading system. However, the Securities and Exchange Commission, which brought the charges, said the original trades were not accepted because they were for funds that were closed to new investors or were placed by customers banned from purchasing shares in a particular fund.

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