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Each of the FAs opened multiple MSDW accounts for their hedge fund customers to facilitate market timing for the hedge funds. In response to market-timing trades, numerous fund companies sent MSDW “block letters,” rejecting particular trades or restricting the trading of particular accounts, customers, or financial advisors that appeared to be market timing. Many of the block letters stated that the frequent markettiming trading was harmful to the funds’ long-term shareholders. The FAs circumvented the fund companies’ restrictions on market timing by employing a variety of deceptive trading practices. These practices included using accounts not restricted by mutual funds to place market-tim...View all