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The SEC charged a former Prudential branch manager and five of his ex-brokers Tuesday with repeatedly timing the market, in the latest chapter of the growing mutual fund scandal.

After questioning an employee with ties to the maligned hedge fund company Millenium Partners LP, New York state investigators may be close to arresting him, sources told Reuters Friday.

Matthew Fink, president of the Investment Company Institute, made an obvious reference to a recent filing by the Jacob Internet Fund during the ICI’s conference call on mutual fund reforms Thursday.

Juan Marcelino announced yesterday that in light of the maelstrom whirling around the mutual fund industry, he is stepping down as district administrator of the Securities and Exchange Commission’s Boston office.

WASHINGTON – The crusade against mutual fund firms for ripping off customers took a major step forward Monday as New York’s top regulator fired a shot across the bow.

Prudential Securities wasn’t told once. It wasn’t told twice. It wasn’t told three times. Mutual fund companies sent the brokerage firm more than 25,000 letters asking it to stop market timing, Massachusetts regulators are expected to charge as early as today, The Wall Street Journal reports. The allegations could result in charges of civil securities fraud.

Instead of earning airline miles or cash back for cardholders, a new credit card introduced by William Blair & Co. and MBNA filters customer rebates into clients’ securities and mutual fund accounts.

In the latest sign that separate accounts are truly going mainstream, Morningstar launched a new star rating system for the investment class Thursday. Some said the new service could ramp up interest in the already rapidly growing separate accounts industry – particularly at a time when mutual funds are engulfed in a regulatory scandal.

New York State Attorney Eliot Spitzer threw another barb at the Securities and Exchange Commission, on the eve of the showdown this week on Capitol Hill – this one apparently directed at Paul Roye, director of the Division of Investment Management.

Eliot Spitzer wants to make sure the mutual fund industry’s laws get changed. So he’s going to the epicenter of where laws get changed: Washington D.C. There, the New York attorney general will take the industry’s annual $70 billion in fees to task.

Larry Lasser, the 18-year CEO of Putnam Investments, has agreed to resign, the firm’s parent company, Marsh & McLennan, announced this morning. He will be replaced by Charles Haldeman, now CEO and president. A.J.C. Smith becomes chairman. The news came as a result of an emergency board meeting early this morning.

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A headache for the mutual fund industry has developed into a migraine as Putnam Investments and two of its portfolio managers have been accused of market timing their own funds.

By integrating Lockwood Financial Services and its Pershing unit into one separately managed account platform, Bank of New York claims that it will be able to increase distribution and launch the next generation of these products.

The fund industry's most prominent shareholder advocate is urging Congress to create an oversight board to protect mutual fund shareholders from fraud.

Fund managers continue to remain optimistic about stocks, even though potential volatility in the currency markets gives them some pause and a majority of them foresee single-digit returns for the foreseeable future, the most recent Merrill Lynch global fund manager survey shows.

A union boilermaker reportedly smashed a brick into the head of a Putnam Investments phone operator earlier this year, worried that the man was about to report the union's questionable stock-trading practices to the Securities and Exchange Commission. The alleged assailant entered the office with his Boilermakers Union Local 5 sweatshirt and a New York Yankees cap, and promptly knocked the man unconscious with the brick while yelling, "Shut the f--- up!"

Half of the companies that the Securities and Exchange Commission has contacted with regards to improper trading have reportedly admitted wrongdoing. Forty-four of the 88 companies who've received letters from the SEC have allowed some form of market timing - including firms whose own policies clearly disallow the practice. Not as many companies have admitted to late trading, however.

If the Securities and Exchange Commission approves a filing by DTCC, the not-for-profit clearing and settlement giant, best known for its work for the mutual fund industry, it will be able to do the same for separately managed accounts.