An investigation by securities regulators has uncovered widespread improprieties in the trading of mutual fund shares at the largest fund companies and brokerage firms in the United States, anofficial at the Securities and Exchange Commission said. The SEC is investigating mutual funds in the wake of several recent disclosures that have shaken investor trust in the industry. A major focusof the investigation is determining how common it is for funds to allow certain investors to trade fund shares rapidly and capitalize on inefficiencies in share prices. The practice, known as markettiming, is not illegal but is discouraged by many fund companies because it can interfere with management of a fund and can allow certain traders to profit unfairly at the expense of other, long-term fund shareholders. The SEC official said on Friday that after sending out 88 letters to mutual fund companies and brokerage firms, the agency found that half of the fund companies hadarrangements with one or more investors allowing them to trade in and out of shares. These arrangements occurred even though about half of the fund companies have policies specifically barring markettiming, the official said. In addition, many fund companies appear to have provided information about their holdings to big investors, like hedge funds, the official said. Such portfolio informationcould help these investors profit by trading the securities being bought or sold by the fund. The SEC also found that a handful of brokerage firms allowed certain customers to make late-day trades infund shares, possibly enabling them to profit from overnight price movements by allowing them to buy at the price that prevailed before the stock market closed. The regulatory official expressedsurprise at the findings and promised fast action against the companies. The SEC investigation comes on the heels of one announced in September by Eliot Spitzer, the New York State attorney general,who uncovered market timing and late trading. So far, one mutual fund executive and another hedge fund trader have entered guilty pleas in that investigation. William Galvin, the secretary of theCommonwealth of Massachusetts, has also been investigating large fund companies, many of which are based in that state. Galvin has led the investigation into practices at Putnam Investments, thefifth- largest U.S. fund company, which manages $272 billion for 12 million investors. Officials at Putnam Investments, a subsidiary of Marsh & McLennan, said on Friday that they had fired fourfund managers for making improper personal trades three years ago in shares of the funds they managed. Putnam dismissed the managers after receiving inquiries from The Boston Globe. The fund hasconfirmed that two other managers engaged in market timing but are still employed by Putnam. Nancy Fisher, a Putnam spokeswoman, declined to identify the fund managers who had been fired or the fundsthey had run, saying that those disclosures would be made soon. Asked why Putnam had not fired the two managers found to have conducted market timing, Fisher explained that they had not traded intheir own fund shares. Putnam has said it will reimburse the funds in which managers traded improperly.