Merrill Lynch has fired three senior brokers for conducting inappropriate mutual fund trades with a hedge fund at the center of a state and federal investigation into trading abuses, according to anexecutive briefed on the matter. In addition, Fred Alger Management, an investment company with $10 billion in assets, suspended three employees because of their possible involvement in some type ofimproper trading. The actions show how Wall Street firms and fund companies, under increasing pressure from regulators, are working to identify employees who may have engaged in inappropriate fundtrading activities and to take action before regulators do. Last week, Alliance Capital suspended two employees, and Prudential Securities dismissed a dozen brokers and managers. The Merrill brokersallowed the hedge fund, Millennium Partners, to engage in market timing, or trading in and out of mutual funds rapidly for short-term gains, the executive said.
