“Alliance Capital Management said yesterday that it had requested the resignations of two senior executives because they failed to prevent improper trading in its mutual funds,” writes Riva Atlas in today’s Wall Street Journal.

“The executives, John D. Carifa, president and chief operating officer of Alliance, and Michael J. Laughlin, chairman of its funds distribution division, were dismissed even as the company scrambled to reach a settlement with regulators who are considering action against it.”

“Alliance, which is based in New York, confirmed last week that it had received a Wells notice from the Securities and Exchange Commission – meaning that the commission’s staff was preparing to take action against the company and giving Alliance a chance to refute any accusations.”

“Alliance was supposed to respond to the S.E.C. notice last week, people briefed on the investigation said, but its lawyers asked for more time.”

“Alliance is trying to reach a settlement with the S.E.C. and the New York State attorney general’s office, though these people said there was still a good chance that regulators would take action against the company, perhaps as soon as next week.”

” ‘Firing people who may have been involved is better than not, but it may not be sufficient’ to satisfy the regulators, one person said.”

“Regulators are looking at which executives at Alliance were aware of rapid trading in and out of the company’s mutual funds by at least two investors – Daniel Calugar of Las Vegas and Edward J. Stern, a hedge fund manager who reached a settlement with Mr. Spitzer in September.”

“Executives at Alliance may have permitted Mr. Calugar to trade in and out of Alliance’s funds in return for investments in the company’s hedge funds, people briefed on the matter have said.”

“Regulators are looking into whether Bruce W. Calvert, Alliance’s chairman, was aware of the arrangement.”

” ‘There were certainly others at the company who knew who have not been terminated,’ ” one person said yesterday.”

“Mr. Carifa and Mr. Laughlin were asked to resign by Alliance’s board because of their role in overseeing Alliance’s mutual fund business and failing to prevent the improper trading in Alliance funds, according to a statement released by the company yesterday.”

“Mr. Carifa, 58, had been with Alliance since 1971, it said, and Mr. Laughlin, 56, joined in 1987.”