The Securities and Exchange Commission is investigating another third-party back-office service company for potential improper marketing arrangements with mutual fund clients.

SEI Investments of Oaks, Pa., is the latest provider of outsourced services to the mutual fund industry to become the target of the regulator's scrutiny of administrative, marketing and distribution fees clients paid as part of service contracts. The SEC has raised concerns about the industry's apparent practice of-and lack of disclosure regarding-the bloating of service fees. The regulator is concerned that a portion of these higher-than-warranted fees paid by fund shareholders for administrative and distribution costs are being rebated to fund companies, which then spend the money to pay other, possibly unrelated, fund company marketing expenses.

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