Fidelity Investments has confirmed it received a subpoena from New York Attorney General Mr Eliot Spitzer as part of a growing mutual fund investigation.
Last month, Mr Spitzer began an investigation into whether some mutual funds let brokers employ illegal trading practices such as late trading.
Late trading is a technique through which broker-dealers take advantage of international markets' time-zone differences to trade mutual funds after hours, operating on so-called stale prices.
Mr Spitzer, in his official complaint, likened the practice to betting today on yesterday's horse race.
The Securities and Exchange Commission (SEC) had also issued guidelines to limit the scope for late trading. The SEC requested information for this invesigation from a number of fund companies, including Fidelity, last month. The firm at that time said it was complying with that request.
Mr Spitzer's investigation is looking at companies such as Bank of America and Bank One. The inquiry has spread to other states such as Illinois and Massachusetts, where state regulators are investigating Putnam Investments and Prudential Securities.