The bloodletting in Eliot Spitzer's mutual fund probe continued with news that four more brokers at


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Smith Barney unit were fired for their involvement in a frowned-upon and costly arbitrage strategy.

The four private client group brokers were let go due to "inappropriate behavior" with respect to mutual fund market-timing, a spokeswoman said.

The firings are the latest in an industrywide house cleaning that began in September when Spitzer announced a $40 million settlement with hedge fund Canary Capital for alleged abuses of the mutual fund pricing mechanism.

Market-timing is a strategy of simultaneous buying and selling of mutual funds and their components in two different markets to capture profits from price discrepancies. While not strictly illegal, it is perceived as unethical because of the expense it creates for a mutual fund that must redeem shares to meet sales by shareholders.

The brokers fired Wednesday weren't the first to lose their jobs at Smith Barney in the wake of Spitzer's probe. At least one other executive left the firm, as have brokers and managers at

Bank of America

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Merrill Lynch



Bank One

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Fred Alger Management


In the Fred Alger case, the brokers were suspended for allowing a client to make after-hours trades in its mutual funds. That patently illegal practice allows a buyer to capitalize on stock price movements that occur after a mutual fund is priced at 4 p.m. ET.