NEW YORK (CNN/Money) - Securities regulators said Tuesday that they've found widespread abuses at 13 out of 15 Wall Street brokerages probed in the sale of mutual fund shares.
As scandals simmered across the $7 trillion mutual fund business, the Securities and Exchange Commission said it found that "revenue sharing" -- or mutual funds paying brokerages to tout the funds' shares -- is "common practice," based on a probe launched in April 2003.
The SEC said it is now investigating "dozens of broker-dealers and mutual funds that engaged in this practice to determine whether they adequately informed investors of the conflicts of interest."
The agency said it found that 14 firms took cash from mutual fund investment advisers and 10 funds accepted payments in the form of brokerage commissions on fund trades.
"In return for these payments, 13 of the 15 firms appear to have favored the sale of the revenue sharing funds by providing increased access and visibility in the broker-dealer's sales networks," the SEC said.
About half of the brokerages targeted in the SEC probe paid individual brokers more for selling the shares of selected, revenue sharing funds or one of the brokerages' own funds than for selling other funds' shares, the SEC said.
About half of the funds targeted disclosed these arrangements, it said.
The SEC staffers made the comment at an afternoon news conference at SEC headquarters.
On Nov. 17, investment bank and brokerage Morgan Stanley agreed to pay $50 million to settle charges that it failed to tell investors about compensation it received for selling certain mutual funds. Without admitting or denying the charges, Morgan Stanley agreed to provide more disclosure about its relationships with mutual fund groups.
At that time, the SEC said it was looking at possibly similar abuses involving as many as 15 brokerages.
Morgan Stanley pledged to no longer accept "soft dollar" payments -- payments for brokerage services through commission revenues rather than direct fees -- on retail sales of mutual funds.
-- Reuters contributed to this story.