New York State Attorney General Eliot Spitzer and the Securities and Exchange Commission today announced criminal and civil actions against Steven Markovitz, formerly an executive and senior trader with the prominent hedge fund firm Millennium Partners, L.P.

According to the criminal charges and the SEC findings, Markovitz engaged in “late” trading of mutual fund shares on behalf of Millennium, one of the largest hedge fund operators in the U.S., with more than US$4 billion under management.” The SEC says Markovitz placed mutual fund orders after 16:00 ET, but obtained the prices that had been set as of 16:00 ET. The illegal trading allowed Millenium to take advantage of events that occurred after the markets closed.

In the criminal action, Markovitz pleaded guilty in State Supreme Court to a violation of New York’s Martin Act. The count is punishable by a maximum of four years in prison. The SEC’s administrative order finds that Markovitz committed securities fraud. Without admitting or denying the SEC’s findings, Markovitz consented to cease and desist from violations of those provisions, and to be permanently barred from associating with an investment adviser or from working in any capacity with or for a registered investment company. The SEC also is seeking disgorgement and civil penalties in amounts to be determined later.

Spitzer said, “This guilty plea is a clear step forward in the investigation and prosecution of wrongdoing in the mutual fund industry. Working with the SEC, my office will continue to pursue this matter aggressively.”

Spitzer and the SEC last month announced parallel criminal and civil charges against an official at Bank of America for unlawful trading of mutual funds. Earlier last month, Spitzer’s office obtained a settlement and cooperation agreement with Edward Stern, principal of another leading hedge fund, Canary Capital Partners, LLC.

The investigations are continuing.