Bear Stearns, the nation's sixth-largest securities firm, violated federal laws intended to protect investors when it helped brokers make...

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Bear Stearns, the nation’s sixth-largest securities firm, violated federal laws intended to protect investors when it helped brokers make illegal after-hours mutual-fund trades, the Securities and Exchange Commission (SEC) has concluded, people familiar with the decision said.

A settlement announced by the SEC yesterday with Brean Murray, a New York brokerage, implicates Bear Stearns, the people said. Brean Murray agreed to pay $150,000 over allegations it “aided and abetted” violations by an unnamed clearing firm that processed the trades. That clearing firm is Bear Stearns, they said.

Bear Stearns Chief Executive James Cayne, 71, declined to comment yesterday on the Brean Murray settlement through spokesman Russell Sherman.

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In a statement faxed to Bloomberg News on Wednesday, Bear Stearns said it had implemented policies on fund trading and that the audit committee of its board had overseen an internal review. Sherman said Bear Stearns will keep cooperating with the SEC.

Bear Stearns’ involvement in after-hours trading came to light in the SEC’s 16-month investigation of conflicts of interest and abusive trading in the $8.1 trillion mutual-fund industry. One of Bear’s customers was Canary Capital Partners, a hedge fund that in 2003 paid $40 million to settle claims of improper trading with New York Attorney General Eliot Spitzer.

“The SEC is clearly trying to corral Bear Stearns, which is the 800-pound gorilla here,” said James Cox, a securities professor at Duke University School of Law. “Why would you go after the small guys like Brean Murray and not go after the big guy, which is Bear Stearns in this case?”

The SEC’s case against Brean Murray is a de facto judgment by the agency that Bear Stearns acted illegally, Cox said.

“You can’t have an aider and abettor without having a primary violator,” he said.

Bear Stearns shares fell $1.47 to $101.13 yesterday.

The mutual-fund scandal has brought down some of the industry’s biggest names and has resulted in more than $3 billion in fines, restitutions to investors and fee reductions.

So far, Bear Stearns hasn’t been sanctioned.