“In Chicago, dead men sometimes vote. In Boston, they trade stocks,” writes Ruth Simon in today’s Wall Street Journal.

“Massachusetts securities regulators announced Monday they had fined Prudential Securities Inc. $250,000 for, among other things, allegedly failing to supervise a broker who made trades in a dead client’s account. According to an administrative complaint, the broker, Marco Carnevale, had acted as a pallbearer for the client, Richard Kelleher Sr., who died before his account was transferred to Prudential.”

The fine is the second largest imposed by Massachusetts regulators against a brokerage firm. It is also the state’s second action against a brokerage firm for allowing a broker to trade in a dead client’s account. ‘This case is troubling to us because of both the supervisory issues and the underlying violations,’ said Massachusetts Securities Commissioner Matthew Nestor.

Susan Atran, a spokeswoman for Prudential, a unit of Prudential Insurance Co. of America, said that Mr. Carnevale and two other brokers named in administrative complaints filed by the state alleging unauthorized trading have been permitted to resign. In addition to the fine, Prudential has agreed to increase supervision at its Boston office. ‘We’re taking steps to deal with affected customers appropriately,’ Ms. Atran added.

In a telephone interview, Mr. Carnevale denied the allegations. ‘It’s all untrue,’ he said. ‘The state of Massachusetts didn’t even hear our side of the story.’ “

Mr. Carnevale moved from Bear Stearns Cos. to Prudential in July 1999. According to Massachusetts regulators, Mr. Carnevale transferred Mr. Kelleher’s Individual Retirement Account to Prudential in July 1999, even though Mr. Kelleher had died that May. Prudential continued to allow trading in the account even after receiving correspondence referring to Mr. Kelleher’s death, according to the agreement signed by Prudential. Mr. Carnevale also transferred money from the IRA into another account to cover margin calls, creating a $250,000 tax liability for Mr. Kelleher’s wife, the administrative complaint filed against Mr. Carnevale stated.