U.S. regulators are probing whether Wellington Management Co. and other big money managers that advise mutual funds gave lucrative investments to favored customers at the expense of other clients, The Wall Street Journal said on Thursday.

The Securities and Exchange Commission is looking at whether the trading desks at Wellington and other money management firms gave an edge to certain clients, possibly because they pay higher fees for asset management, the newspaper said.

Regulators are particularly interested in how shares of initial public offerings of stock are distributed, because new share issues often jump on their first day of trading, the Journal said.

At Boston-based Wellington, regulators are focusing on the fairness of the allocations of IPOs and other stock trades, the newspaper said, citing an unidentified person familiar with the matter.

Wellington disclosed on Wednesday that regulators are investigating it, but not for the type of trading practices at the center of the scandal that has rocked the $7.6 trillion mutual fund industry. Regulators have found that some fund firms allowed clients to engage in prohibited fast-paced buying and selling of shares or even illegal late trading.

Wellington was not immediately available for comment on Thursday.

(WSJ)