The BISYS Group of New York revealed a few more sketchy details last week about the continuing Securities and Exchange Commission investigation it is embroiled in over fees it paid for distribution, marketing and certain other expenses on behalf of its mutual fund clients.

BISYS' investor relations release aside, Industry sources point to side reimbursement agreements between BISYS and its fund clients as the cause for the regulatory rumble.

While the nation's sixth-largest full-service mutual fund provider, overseeing $240 trillion in assets, has yet to explain the exact nature of these payments, BISYS did reveal that such payments were made out of the servicing fees it collected from some of its mutual fund clients. That practice has either been terminated or is in the process of being terminated, BISYS conceded, fueling speculation that whatever that practice is, it may have raised the ire of the securities industry regulators who've been grappling with a gamut of mutual fund practices since September 2003.

(To read more, see this week's hard-copy issue of Money Management Executive.)

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