Updated from 9:19 a.m. EST

New York Attorney General Eliot Spitzer plans to file civil and criminal charges against several fund firms in the coming weeks. Alliance Capital ( AC), Strong and Amvescap's Invesco unit will face charges, as well as trading platform Security Trust, a source confirmed.

Meanwhile, the whip came down on two high-level officials at Alliance Capital as the mutual fund firm scrambles to address the abusive trading scandal. The company said John D. Carifa -- the firm's president and chief operating officer, as well as a director of the company and the chairman of a separate board devoted to the firm's mutual funds -- has resigned, as has Michael J. Laughlin, chairman of Alliance's fund-distribution unit.

The news that Spitzer plans to file charges, first reported in the Financial Times, is the other shoe to drop since Sept. 3, when Spitzer's $40 million settlement with Canary Capital Partners revealed that four fund firms allowed the hedge fund to engage in improper trading of their funds.

Security Trust and Strong were mentioned in the initial complaint, as was Janus ( JNS), Bank of America's ( BAC) Nations Funds and Bank One ( ONE). Security Trust allegedly allowed Canary to "late trade" hundreds of funds, a clearly illegal practice that involves trading after the market's close but getting the pre-4 p.m. fund share price in violation of forward-pricing rules.

The Invesco news may come as a surprise to some because the firm hasn't been named in any complaints. However, the mutual fund firm had been subpoenaed. And on Oct. 30, TheStreet.com published an article showing that several Invesco funds raised red flags over potential market timing, based on Lipper data. A few days later, a Morgan Stanley analyst in the U.K. subsequently published a cautionary note about Amvescap, noting that some funds raised red flags on market timing based on the data TheStreet.com received from Lipper.

Strong, meanwhile, allowed Canary to engage in "time zone arbitrage," a trading practice that takes advantage of stale prices in funds. While not technically illegal, most fund firms discourage the practice because it skims profits off of long-term investors. It was subsequently revealed that founder Richard Strong had engaged in market timing in some of Strong's funds; he subsequently stepped down.

Alliance Capital, meanwhile, was found to have allowed market timing in its $3.3 billion AllianceBernstein Technology fund. Fund manager Gerard Malone stepped down after the firm's internal investigation revealed the abusive trading.

The charges are expected to be filed over the next two weeks. The specific charges in each instance weren't immediately clear, and Spitzer's office declined to comment. The Securities and Exchange Commission will also file lawsuits to accompany the charges, according to the Financial Times.

Separately, Alliance Capital CEO Lewis Sanders said in the company's news release that he requested the two resignations "because they had both senior and direct responsibility over the firm's mutual fund unit, which, as previously reported, allowed inappropriate market-timing transactions, some of which had an adverse impact on mutual fund shareholders."

Alliance said it would continue to cooperate with authorities and said "there is a high likelihood that Alliance Capital will face sanctions and penalties as the firm works to bring this matter to a close."

Alliance said Gerald Lieberman will become the firm's operating chief and a director on the company's board. Lieberman has been with Alliance since 1999; before that he worked at Fidelity and Citigroup ( C). Marc Mayer, currently Alliance's head of institutional sales and marketing, will assume the leadership of Alliance's fund business. Lastly, David Steyn was named head of the institutional sales and marketing unit to replace Mayer.

"Enduring trust is earned only by consistent behavior over time, behavior that at every turn makes it clear that client interests come first and that all clients are treated fairly and equitably without exception. We must live up to this standard at Alliance Capital," Sanders said.