Three former Wall Street executives arrested in the mutual fund industry trading investigation were indicted Monday on securities fraud and grand larceny charges.

The executives, Grant Seeger, William Kenyon and Paul Flynn, all pleaded innocent in a New York state court. A judge ordered a November trial in the 98-count indictment filed by New York Attorney General Eliot Spitzer.

Seeger and Kenyon were the top executives at

Security Trust

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, the Phoenix-based trust bank that regulators are shutting down because of its involvement in the mutual fund trading scandal. Security Trust, which administered hundreds of retirement and pension plans, permitted several hedge funds to engage in late trading and market-timing of mutual funds.

Flynn is a former investment banker with

Canadian Imperial Bank of Commerce

(BCM) - Get Report

, which provided up to $1 billion in financing to hedge funds engaged in improper mutual fund trading. Earlier this month, New York authorities arrested Flynn outside his Larchmont, N.Y., home and charged him with providing financing to at least one hedge fund that made late trades with Security Trust.

Flynn's group at CIBC had specialized in credit derivatives, most commonly "total return swaps," a popular leverage tool in the hedge fund world. Hedge funds favor the vehicle, in which the economic performance of a specified asset is exchanged for cash payments pegged to a benchmark, because they act like loans with a more favorable tax treatment. The group also provided standard margin loans.

Sources said the total return swaps enabled hedge funds to invest several times as much money as they normally could have. The

Securities and Exchange Commission

, in its complaint, alleged that Flynn negotiated and structured swaps and loan agreements that provided the hedge funds with leverage of at least 3 to 1 to trade in mutual fund shares.

In the indictment, Seeger and Kenyon were also charged with falsifying business records. The indictment lists the names of more than a dozen mutual funds the men are accused of defrauding and stealing money from. The funds include those sold by

Artisan Funds

,

Fidelity

,

Franklin Templeton

(BEN) - Get Report

,

Janus

(JNS)

and

Sun Life's

(SLF) - Get Report

Massachusetts Financial Services.

Many of the hedge funds that received financing from Flynn's group were customers of

Oppenheimer

(OPY) - Get Report

broker Michael Sassano, said by regulators and securities industry sources to be a central figure in the mutual fund investigation. Sassano had been a top-performing broker at CIBC before the Toronto-based bank sold the Oppenheimer division in early 2003.

Sources said Sassano is currently living in Russia with his longtime girlfriend. A woman in Sassano's office in New York said the broker is no longer working out of that office, but she declined to say where he is working now. An Oppenheimer official, when asked about Sassano's status with the firm, said, "no comment."