More Mutual Funds Implicated

One of the rockiest periods in the history of mutual funds is about to get a lot worse. Today brings news of six more funds that have caught the eye of various regulators. Here's the rundown:

• J.P. Morgan Chase (NYSE: JPM) -- The New York Times is reporting that the NASD is investigating more than two dozen brokers to see if they improperly sold mutual funds in order to increase commissions. About a dozen of the brokers' supervisors are also being investigated. The probe centers on brokers who allegedly sold Class B shares to investors, the paper says, instead of the more appropriate Class A shares -- which have lower continuing fees. The brokers may not have disclosed the higher fees to customers.
  
  
• MetLife (NYSE: MET) -- The life insurer revealed late Friday that it's been asked for information related to market timing and late trading of mutual funds and variable insurance products. The company says it's in the process of responding, but is not aware of any systemic problems that would affect its financial position. It did not say which agency is investigating.
  
  
• Empire Financial (AMEX: EFH) -- The broker-dealer said in a filing that it and four of its employees have received subpoenas from the SEC requesting information and documents in relation to market timing and late trading of mutual fund shares. The company said its own internal investigation has turned up instances where employees assisted clients in engaging in market timing and also entered orders after 4:00 p.m. for the trading of mutual fund shares.
  
  
• New York Attorney General Eliot Spitzer is preparing to file several civil and criminal charges, according to London's Financial Times. The funds involved include the Invesco unit of Amvescap (NYSE: AVZ), Strong Capital Management, and Alliance Capital Management (NYSE: AC).
  
  
• Alliance, meanwhile, has announced the resignations of John Carifa -- president, COO, and director of Alliance Capital and chairman of the board of its mutual funds -- and Michael Laughlin, chairman of the mutual fund distribution unit. CEO Lewis Sanders (not related to The Colonel) asked for the resignations because both had "senior and direct responsibility" over the tainted mutual fund unit.

For more on the scandal, including what you need to do as an investor, see Bill Mann's 9 Funds Under Suspicion and David Gardner's Decoding the Fund Scandal.