A division of Fiserv Inc. is being investigated for possible improper mutual fund trading practices, the company’s chief executive said Thursday, the Associated Press reports.

The Brookfield, Wis.-based firm, which provides transaction processing and other back-office services for financial services firms has fired or reassigned roughly a dozen employees following an inquiry from the Securities and Exchange Commission an its own internal review, CEO Leslie Muma told analysts on a conference call.

Under securities regulations, the SEC holds Fiserv accountable for clearing improper trades for broker-dealers who were clients. Depending on the outcome of the probe, the firm could face fines and other penalties from regulators. Muma told analysts the company has been cooperating with the SEC.

Much of the impropriety being investigated involves market timing and late trading transactions that were processed through a clearing business Fiserv bought back in 2002 from Investec Ernst & Co., Muma said.

He admitted that the company reaped $4 million to $5 million in transaction fees from broker-dealers as a result of the inappropriate trades. "It was for the most part several hedge funds that will go nameless, a total of probably four or five customers- a very tiny part of Fiserv’s business," he said.

The company has since implemented more stringent compliance controls and is evaluating its business relationships. "Any customers that we feel are weak or suspect or could potentially have problems, we’re asking them to leave," Muma said.

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