NEW YORK - New York Attorney General Eliot Spitzer's crackdown on alleged illegal trading schemes by four mutual fund companies with a hedge fund could wreak havoc on the mutual fund industry's insistence on its squeaky-clean image. The thought of fund companies cutting deals with arbitrageurs and market timers may be hard for investors to swallow. And if this potentially multi-billion-dollar practice is as widespread as Spitzer believes, it could have serious implications beyond the four firms named: Bank One Corp., Bank of America's Nations Funds, Janus Capital and Strong Capital.

"I think it's probably the most damning news we have heard about the fund industry in a while," said Kunal Kapoor, associate director of mutual fund analysis at Morningstar of Chicago.

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