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Marking the Close: "In the mutual fund world, there is a practice known as “marking the close”. The SEC defines marking the close, which is illegal, as 'attempting to influence the closing price of a stock by executing purchase or sale orders at or near the close of the market.' Right before the close of trading, at the end of the quarter when they have to publish performance numbers, funds will place buy orders on stocks that they already own. That will cause the price of their stocks to rise and thus make the performance of their funds look better than they otherwise would. Four researchers, led by Mark Carhart, co-head of quantitative strategies at Goldman Sachs Asset Management, have collected overwhelming evidence that mutual funds have engaged in this illegal behavior for years and they published it in the April 2002 issue of the Journal of Finance under the title “Leaning for the Tape: Evidence of Gaming Behavior in Equity Mutual Funds”. Evidence suggesting that mutual funds are marking the close comes from the percentage of them that beat the market averages on the final trading days of each calendar quarter. For example, the researchers found that on the last trading days of the calendar quarters between July 1993 and June 1999, some two-thirds of all domestic equity funds beat the S&P 500 -- about"