The mutual fund scandal took yet another turn on Tuesday when the Securities and Exchange Commission announced it has found widespread abuse in how Wall Street brokerage firms sell mutual funds.

The SEC's nine-month investigation of 15 brokerage firms found that 14 of them received cash from funds' investment advisers. In return for these payments, 13 of the 15 firms appear to have favored the sale of the revenue-sharing funds over other funds by providing increased visibility for the funds in the broker-dealers' sales networks -- such as listings on firms' Web sites, access to sales staff, promotional materials sent to customers, inclusion on "preferred" lists and the like.

These revenue-sharing arrangements are commonly called "paying for shelf space" and aren't illegal. But while fund companies insist such payments are necessary to get brokers to notice their products, critics argue that these arrangements amount to little more than bribes intended to get brokers to push particular products.

Another (related) type of arrangement is that of fund companies' paying additional brokerage commissions on the sale of their funds. Ten of the 15 companies investigated by the SEC accepted revenue-sharing payments in the form of brokerage commissions on fund trades. Revenue-sharing payments vary between 5 and 40 basis points (0.05% and 0.4%) on sales, and from zero to 25 basis points (0.25%) on assets. In other words, for every $100,000 in new sales, a broker-dealer would receive between $50 and $400 annually, and for every $100,000 invested, the broker-dealer would receive up to $250 annually.

Extra payments weren't limited to the funds' slipping the broker-dealer some additional cash, the SEC said. About half of the broker-dealers examined also paid their own registered representatives more when they sold one of the "revenue-sharing" funds or a proprietary fund.

The broker-dealers aren't the only target of the SEC's ongoing investigation. The regulators also will probe eight mutual fund families involved in such transactions. Stephen Cutler, director of the SEC's enforcement division, wouldn't release any names of firms under investigation.

One firm likely to be on the list, though, is Edward Jones, one of the nation's largest retail brokerages. In late December, the firm announced it would postpone the sale of its $150 million in limited partnerships, citing concern that changes in the regulatory landscape would have a negative impact on its profitability. Regulatory filings reveal that such payments generate tens of millions of dollars for Edward Jones each quarter.

Morgan Stanley was the first firm to be tainted by this issue. On Nov. 17, the firm agreed to pay $50 million to settle charges that it failed to tell investors about compensation it received for selling certain mutual funds. Morgan Stanley didn't admit or deny the charges, but the firm did agree to provide investors with greater disclosure regarding its relationships with mutual fund groups.

In addition to actions taken by its enforcement division, the SEC will discuss making such disclosure standardized.

Annette Nazareth, director of the SEC's division of market regulation, outlined two proposals that will be discussed on Wednesday. Both will require increased disclosure as to the nature of any revenue-sharing agreements.

The first will require that brokers disclose all contingent costs in the sale confirmation letter in both dollar figures and as a percentage of assets. That would include all sales loads, annual asset-based fees (such as 12b-1 fees), revenue-sharing payments and portfolio brokerage commissions. The confirmation -- which is sent out after the fund shares have been purchased -- also would have to include comparative data for funds in the 95th percentile as well as the median figures. "This is the first time we've suggested requiring comparative data be pushed to the customer," Nazareth said.

The second disclosure requirement proposed is one that would be made at the point of sale. Essentially all the same information would have to be provided to the potential investor at the time of purchase. Figures that can't be calculated in real time would be omitted, but brokers still would have to disclose what types of revenue-sharing arrangements they've made.

About half of the 15 broker-dealers investigated disclosed their revenue-sharing arrangements in some way. That disclosure ranged from simply noting the existence of a revenue-sharing agreement to specific references to the types of funds that make payments.