NEW YORK (AP) — Regulators were preparing to file civil charges Tuesday against Invesco Funds Group Inc. and its chief executive in the rapidly expanding mutual fund trading scandal.

New York State Attorney General Eliot Spitzer and the Securities and Exchange Commission contend the Denver-based company permitted hedge funds and other large clients to engage in frequent, short-term trading that would not be tolerated from other investors, a source familiar with the matter said.

The company’s chief executive, Raymond Cunningham, also knew of the trades, according to the source, who spoke on condition of anonymity.

A call to Invesco Funds seeking comment was not immediately returned. The company has previously denied any wrongdoing, saying it always protected shareholders’ interests.

The investigation of the mutual fund industry has already resulted in complaints against other well-known fund companies, including Putnam Investments and the Pilgrim Baxter fund family. Others, including Strong Financial Corp. and Alliance Capital Management, have acknowledged that improper trading occurred but not been charged.

Regulators say a number of fund companies allowed certain clients to make frequent, in-and-out trades in mutual funds. The practice, known as market timing, is not illegal — but strictly limited by most fund companies because it can skim profits from longer-term shareholders and increase transaction fees.

Authorities contend that funds that prohibited or restricted such trades but then made selective exceptions for big clients, such as hedge funds, committed fraud.

Invesco is owned by London-based Amvescap PLC, which also operates the AIM and Atlantic Trust brands. Amvescap had $345.2 billion in funds under management as of Sept. 30.

NEW YORK (AP) — Regulators were preparing to file civil charges Tuesday against Invesco Funds Group Inc. and its chief executive in the rapidly expanding mutual fund trading scandal.

New York State Attorney General Eliot Spitzer and the Securities and Exchange Commission contend the Denver-based company permitted hedge funds and other large clients to engage in frequent, short-term trading that would not be tolerated from other investors, a source familiar with the matter said.

The company’s chief executive, Raymond Cunningham, also knew of the trades, according to the source, who spoke on condition of anonymity.

Invesco Funds denied any wrongdoing Tuesday and said it would “vigorously” contest any charges against the company or its employees.

Colorado Attorney General Ken Salazar scheduled a news conference Tuesday to announce legal action against a mutual fund company. A spokesman declined to name the company.

The investigation of the mutual fund industry has already resulted in complaints against other well-known fund companies, including Putnam Investments and the Pilgrim Baxter fund family. Others, including Strong Financial Corp. and Alliance Capital Management, have acknowledged that improper trading occurred but not been charged.

Regulators say a number of fund companies allowed certain clients to make frequent, in-and-out trades in mutual funds. The practice, known as market timing, is not illegal — but strictly limited by most fund companies because it can skim profits from longer-term shareholders and increase transaction fees.

Authorities contend that funds that prohibited or restricted such trades but then made selective exceptions for big clients, such as hedge funds, committed fraud.

Invesco is owned by London-based Amvescap PLC, which also operates the AIM and Atlantic Trust brands. Amvescap had $345.2 billion in funds under management as of Sept. 30.