Wall Street icon Bear Stearns could be the next firm to face civil charges in the U.S. mutual fund trading scandal.

“In relation to an ongoing investigation by the Securities and Exchange Commission into mutual fund trading practices, Bear, Stearns & Co. Inc. and Bear, Stearns Securities Corp. have received a notice that the staff of the SEC is considering recommending that the commission bring a civil injunctive action and/or issue an administrative cease and desist order against them,” the company said Wednesday.

The firm says that if the SEC does go ahead with charges, this could result in, among other things, disgorgement, civil monetary penalties, and other remedial sanctions. Bear Stearns says that it is cooperating fully with the SEC in this case.

In March, Bear Stearns ousted three employees from its trade-processing operation for alleged improper mutual-fund trading. The trade-processing, or “clearing,” operation processes trades for hundreds of small and midsize brokerage firms.

The revelation comes in the firm’s latest quarterly earnings announcement, which also reports that earnings grew 24% to US$347.8 million last quarter. Net revenues were up 17.8% to US$1.7 billion from US$1.5 billion in the second quarter of 2003.

Global Clearing Services revenue was up 19.4% to $223.7 million, and fixed income net revenues were up 10.4% to reach new high of $844.4 million. Institutional equities net revenues were $252.0 million, up 33.1%, and investment banking net revenues rose 14.1% to $254.9 million. Equity underwriting continued to show improvement, while merger and acquisition advisory fees were flat, it reports. And, wealth management net revenues for the quarter were $176.5 million, up 41.9%.