Canary Capital's Broker Could Face Criminal Charges

New York Attorney General Eliot Spitzer is weighing criminal charges against Security Trust, an Arizona investment firm caught in the crosshairs of the mutual fund trading scandal.

A source in Spitzer's office said prosecutors have determined that Security Trust's conduct in the mutual fund scandal is criminal in nature. But Spitzer has decided to give the brokerage an opportunity to explain its actions and demonstrate why it should only face civil liability.

Early on in the fast-spreading mutual fund scandal, Spitzer's office identified Security Trust as an outfit that assisted several hedge funds in engaging in improper trading in shares of various mutual funds. ...