Minnesota may be getting ready to edge into the mutual fund regulation game. Governor Tim Pawlenty said that Minnesota regulators in the state's commerce department will review fund firms based in the state to see if they turn up any regularities in fund trading, according to a Reuters report.

The Minnesota Commerce Department is headed by Glenn Wilson. He is expected to ask the fund firms about the timing and volume of trades, as well as employee and third-party trading practices. He will also ask the firms to explain any trading problems they have identified and how they responded to them.

On Monday, Pawlenty also asked the Minnesota state board of investment to review its holdings and see if asset managers were holding mutual funds now under review by the Securities and Exchange Commission. The board of investment runs the state pension program.

In making the move Minnesota regulators are following in the footsteps of regulators in New York and Massachusetts. It may also signal that funds face possible probes in multiple states as the scandals gain legs with politicians.

Pawlenty said he ordered the probe because he was concerned about alleged abuse of fund shareholders uncovered by the other states.

"There is no reason to believe that Minnesota mutual funds have engaged in illegal trading," the governor said in a statement. "Yet, Minnesota consumers who invest want and need the assurance that each company has the proper controls and policies in place to prevent these kinds of abuses."

The largest of more than a dozen fund firms based in Minnesota is American Express. Other fund firms include Advantus Funds, Arbor Capital Management, Kopp Funds, Perkins Capital Management, SIT Funds, US Bank, Voyageur Asset Management and Wells Fargo.  

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