The SEC's investigation into BISYS marketing and distribution agreements with a number of its mutual fund clients has turned up its first related fatality: AmSouth Bank.

The Securities and Exchange Commission has issued a Wells Notice to the bank over administration of its AmSouth Funds.

The Commission's investigation is tied to how BISYS used fund administration fees from AmSouth and other large fund complexes to pay for marketing and distribution (see "BISYS, SEC on Brink of Settlement; Financial Restatements Ahead," MME 8/1/05). As BISYS provides fund administration to scores of mutual fund companies, it is possible that any transgressions at BISYS could point to problems at multiple fund companies, not just AmSouth, down the road.

AmSouth said it is cooperating fully with the regulator and that its board of directors is looking into the matter, prepared to make any restitution necessary to investors. SEC spokesman John Heine declined comment for Reuters, while BISYS did not immediately return a phone call. Earlier, the firm indicated it anticipates a $25 million fine.

Meanwhile, according to news reports, AmSouth's plan to sell its mutual fund family of 23 funds with $5.5 billion in assets to Pioneer Investment Management by the end of this month is still on track. AmSouth has a total of $50.5 billion in assets under management through 685 branches in the south.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.