A Securities and Exchange Commission settlement reached with New York-based brokerage firm Brean Murray & Co. sheds light on federal laws that securities firm Bear Stearns violated when it helped brokers at Brean Murray make illegal after-hours mutual fund trades, Bloomberg News reports.

As part of the settlement, Brean Murray last week agreed to pay $150,000 for allegedly being party to the violations by an unnamed clearing firm. People familiar with the decision told Bloomberg that firm was Bear Stearns.

Bear Stearns Chief Executive Officer James Cayne declined to comment on the Brean Murray settlement through spokesman Russell Sherman. Sherman told Bloomberg that the company had executed policies on fund trading and the audit committee of its board had monitored an internal investigation. He said Bear Stearns would continue to cooperate with the SEC.

The investigation into late-trading activities at Bear Stearns is part of a broader 16-month

probe by the SEC of abusive trading practices in the $8.1 trillion mutual fund industry.

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