The mutual fund scandal is starting to include more characters than a Dickens novel -- and the plotline isn't any less murky, either.

While the end of this tale is still somewhat shrouded, the narrative is complex enough to warrant

TheStreet.com's

version of the ubiquitous

Cliff's Notes

.

To that end, we're providing a list of the major players (ranked loosely from the most egregious charges to the least), a summary of their situation, and a tiny bit of prognosticating as to the likely outcome.

The first chapter began on Sept. 3, when New York Attorney General Eliot Spitzer

announced a $40 million settlement with hedge fund manager

Canary Capital Partners

. Canary allegedly engaged in illegal trading in mutual fund shares sold by

Bank of America

(BAC) - Get Report

,

Bank One

(ONE) - Get Report

,

Janus Capital Group

(JNS)

and

Strong Capital Management

.

The settlement was reached quickly -- and Canary did not admit to any wrongdoing -- but it touched off a firestorm of subpoenas and clearly indicated that there was much more to the fund scandal story.

"Spitzer likely agreed to limit it to civil actions in exchange for more information on others," says Carl Frischling, an attorney with Kramer, Levin, Naftalis & Frankel. "It's no different than a criminal proceeding -- Canary cooperated and received special consideration."

Other fund companies may not fare so well, though. The news that

Putnam

has

agreed to settle with the

Securities and Exchange Commission

indicates that most (if not all) fund companies targeted by the probe will settle before charges are even brought -- particularly companies such as Janus that face milder allegations.

There are also the multiple prosecutors to consider as well -- in addition to Spitzer's investigation, the SEC has launched its own probe, and the Massachusetts attorney general has also gotten in on the act. State attorney generals can prosecute both civilly and criminally, but only under state statute. As a regulatory body, the SEC can only bring civil charges, albeit with national scope. Federal criminal charges would have to be brought by the U.S. attorney general's office.

The two primary issues central to the fund scandal are late trading and market-timing. Late trading is the illegal practice of allowing certain investors to purchase fund shares at that day's closing price, even several hours after the market's close -- when they should technically be buying the fund at the following day's opening price. Market-timing, while not explicitly illegal, can quickly become a breach of fiduciary duty or even criminal insider trading. (For more on the finer points of this issue, see "

When Unethical Fund Trading Becomes Illegal.")

It will take some time to determine the fallout from the fund scandal, but -- as with the Wall Street analyst scandal -- most of the accused will likely settle with little fanfare. All fund companies named have thus far pledged to repay any money lost as a result of market-timing or other trading shenanigans, although what additional fines they'll have to pay still remains to be seen.

Here's our rundown of the players, starting with the most egregious:

The Company:

Putnam Investments, a unit of

Marsh & McLennan

(MMC) - Get Report

.

The Allegation:

The first mutual fund family to be charged in the trading scandal, Putnam is accused of engaging in securities fraud by failing to disclose that two of its managers "engaged in excessive short-term trading of Putnam mutual funds" for their own benefit, according to the charges. The two managers -- Justin Scott and Omid Kamshad -- were also charged with securities fraud and engaging in market-timing in shares of their own company's funds. Total amount of alleged ill-gotten gains: more than $1 million.

The Status:

The SEC and Putnam announced Thursday that a partial settlement has been reached. Putnam will admit that it committed securities fraud when it allowed traders to carry out market-timing strategies in its own mutual funds and agreed to a system of calculating how much it owes its shareholders. Just how much in civil penalties and other monetary relief Putnam will owe has yet to be determined. Civil charges were also brought by Massachusetts Secretary of the Commonwealth William Galvin, and they also allege that at least four other Putnam employees engaged in market-timing.

The Fallout:

Massachusetts, Rhode Island and Iowa are eliminating Putnam from their public employee pension plans. Marsh & McLennan fired Putnam CEO Lawrence Lasser.

The Assessment:

The charges against Putnam are the most heinous. Regulators contend that Putnam knew as early as January 2000 that Scott and Kamshad were routinely making short-term trades worth hundreds of thousands of dollars. The firm allegedly told them to stop but failed to enforce any warning when the managers allegedly continued their suspect trading.

The Company:

Strong Capital Management.

The Allegation:

Market-timing. CEO Richard Strong has been accused of personally skimming some $600,000 from Strong funds through market-timing. Strong funds were also mentioned in the illegal trading allegations against Canary Partners.

The Status:

Currently under investigation by both Spitzer and the SEC. No charges have been made.

The Fallout:

Strong resigned from his position as chairman of Strong Mutual Funds -- a position he's held since founding the company in 1974. He remains chief executive of Strong Capital Management, the fund family's parent company.

The Assessment:

Again, a gross breach of fiduciary duty. While Strong is a much smaller player than Putnam in the fund business, the idea of a fund's chief executive trading in his own funds at the expense of his clients is inexcusable -- and possibly worthy of criminal and/or civil charges of insider trading. Spitzer will almost certainly bring civil and criminal charges; the SEC has not yet indicated its plans.

The Company:

Nations Funds, a unit of Bank of America.

The Allegation:

Market-timing and late trading. Brokers in the bank's Nations Funds unit are accused of helping Canary Partners purchase fund shares after the close of trading, but at that day's close price. Bank officials mentioned in Spitzer's allegations are broker Theodore Siphol; branch manager (and one of Siphol's supervisors) Charles Bryceland; Robert Gordon, co-president of Banc of America Capital Management; and Richard DeMartinit, head of BofA's asset management division. Spitzer and the SEC announced state criminal and federal civil charges against Sihpol for his alleged role involving unlawful trading of mutual funds; the others have not been charged.

The Status:

Under investigation by Spitzer and the SEC. No charges have been levied.

The Fallout:

Sihpol and Bryceland are no longer with the bank.

The Assessment:

Of the four fund families named in Spitzer's allegations against Canary, Bank of America is the only one to be accused of late trading -- a practice that's illegal under virtually any circumstances.

The Company:

Fred Alger Management

The Allegation:

Late trading and market-timing.

The Status:

Currently under investigation by Spitzer and the SEC for allowing hedge fund

Veras Investment Partners

and possibly others to illegally purchase fund shares after the market's close at the same day's price.

The Fallout:

Former Vice Chairman James P. Connelly Jr. pleaded guilty to a charge of tampering with evidence during the course of the SEC's and Spitzer's investigation. Connelly also paid a $400,000 fine to settle a civil enforcement case brought by the SEC in a related investigation.

The Assessment:

Despite Connelly's individual woes, the firm is likely to settle any charges that may be brought against it.

The Company:

Prudential Securities, joint venture run by

Wachovia

(WB) - Get Report

and

Prudential Financial

(PRU) - Get Report

.

The Allegation:

Seven former Prudential brokers allegedly engaged in market-timing in several thousand trades, allegedly reaping millions in gains.

The Status:

The SEC and the state of Massachusetts filed securities fraud charges against Prudential brokers Martin Druffner, Justin Ficken, Skifter Ajro and branch manager Robert Shannon. The SEC also charged brokers John Peffer and Marc Bilotti, while Massachusetts filed charges against former branch manager Michael Vanin.

The Assessment:

The firm itself was not accused of any wrongdoing, though Massachusetts officials contend that Prudential management ignored complaints of several fund companies. Over a two-year stretch ending in September 2003, at least 68 mutual fund companies sent letters to Prudential Securities complaining about market-timing trades, according to regulators. The funds generated more than 25,000 "warning" notes about the brokers' alleged behavior.

The Companies:

Alliance Capital Management

(AC) - Get Report

. Janus Capital Group.

One Group

funds, a unit of

Bank One

.

The Allegation:

Market-timing. The SEC contends that Alliance failed to stop improper trading in its mutual funds. Janus and One Group were named in the allegations against Canary. The rest were targeted as the investigations expanded.

The Status:

Alliance looks like the next on Spitzer and the SEC's hit list. Expect both to file civil charges any day now. The others are under investigation by both Spitzer and the SEC, although no charges have been brought.

The Fallout:

North Carolina is considering removing Alliance from its state pension plan. Alliance fired president John D. Carifa and chairman Michael McLaughlin. Mark Beeson, head of Bank One's fund group, resigned, along with John AbuNassar, head of the bank's institutional asset management group.

The Assessment:

Settlements all around. "We're likely to see lots of settlements -- no fund company can afford to be a rolling page-one story. They see what's happened to Putnam," says John Coffee, a professor at Columbia University's law school. "Spitzer and the SEC will be able to get pretty much anything they ask for

from the fund companies once it's clear they're able to credibly charge them with something."