updated 4/1/2004 8:29:03 AM ET 2004-04-01T13:29:03

Brokerage Bear Stearns Cos. let go of three employees in connection with the alleged improper trading of mutual funds and a senior executive has taken voluntary leave, the Wall Street Journal said on Thursday.

Citing people briefed on the matter, the Journal said three employees in Bear Stearns’ trade processing operation left as a result of their roles in alleged late trading and market timing by some of the firm’s clients.

The U.S. Securities and Exchange Commission and the Justice Department’s U.S. attorney in Manhattan are investigating whether Bear employees were aware of, or knowingly helped with improper trading, the Journal said.

The three employees left the firm earlier this year while earlier this month, a clearing unit senior managing director Michael Zackman, asked for an “extended leave” from the brokerage, the Journal said.

A Bear Stearns spokesperson could not be immediately reached for comment.

Late last year, the New York brokerage firm said it received subpoenas from the U.S. Attorney in New York and the U.S. Securities and Exchange Commission, and a request for information from the New York Stock Exchange and the Commodity Futures Trading Commission concerning fund trading.

Bear Stearns in October had said it had received a subpoena from New York Attorney General Eliot Spitzer and an information request from the SEC. Earlier in November, Bear Stearns fired six employees in its private client unit unit for their roles in market-timing of mutual fund shares, according to NASD regulatory filings.

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