WE MAKE MONEY THE OLD-FASHIONED WAY - Insider Information

November 3, 2003 Brokers admit to shady trading- SEC survey finds key investors get edges over rest - Indicating widespread improprieties in the nation's $7 trillion mutual fund industry, one-quarter of fund brokers surveyed by the government acknowledged letting customers make apparently illegal after-hours trades, a top regulator plans to tell Congress on Monday.

Stephen Cutler, director of enforcement for the Securities and Exchange Commission, also is expected to tell a Senate subcommittee that half of the mutual funds surveyed agreed to let some shareholders engage in questionable "market timing," in which select clients quickly buy and sell funds to try to profit in a way that most individual investors cannot.

In addition, Cutler is expected to disclose that nearly one-third of the mutual funds acknowledged providing what he called "questionable" disclosures about their investments to outside parties, giving them an opportunity to make more informed investment decisions than average shareholders.

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