Two former financial advisers at Morgan Stanley face a complaint by the Securities and Exchange Commission for allegedly using market-timing techniques to generate nearly $1 million in fees, according to Reuters.

A complaint filed in U.S. District Court in Manhattan states that Darryl Goldstein, 36, and Christopher O'Donnell, 45, engaged in more than 4,000 market-timing trades with a total trading volume exceeding $4.8 billion through 122 brokerage accounts between January 2002 and August 2003.

The brokerage accounts were used to conceal market-timing trading by circumventing existing restrictions, the SEC said.

“The defendants intended to, and did, make it more difficult for the mutual funds to detect and prevent their customers' market-timing trading,” the complaint said.

In less than two years, Goldstein and O’Donnell generated almost $1 million in fees and “in the process harmed countless unsuspecting mutual fund shareholders,” the SEC said.

Goldstein worked at Morgan Stanley DW from October 2000 to November 2003 and is now a registered representative at Gilford Securities Inc. O'Donnell worked at Morgan Stanley from August 1998 to March 2004 and is currently a registered representative for Bear Stearns.

The men were not available for comment on Friday, and a Morgan Stanley representative did not have an immediate comment.

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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