Hedge funds were expected to return some of their profits by paying inflated commissions on other trades.

The regulators singled out First Boston, accusing it of demanding that customers pay back some of the profit they made from trading new stocks in the form of inflated commissions on other stock trades.

Among other abuses, Marlborough was found to have sold paintings to favored clients at less than market value and to have collected inflated commissions.

Regulators and federal prosecutors are also conducting a criminal investigation into whether certain investment banks received kickbacks of I.P.O. trading profits in the form of inflated commissions, usually in other stocks.

Those kickbacks may have taken the form of additional or inflated commissions, usually in the trading of other stocks.

For Mr. Langone, the $4.1 million that the NASD said Invemed had made from the inflated commissions, was, relative to his wealth, a rounding error.

In his testimony he referred to the inflated commissions as "bribelike."

Such inflated commissions - institutional customers typically pay 6 cents a share to trade - allowed Invemed to share in its customers' profits, NASD said.

Indeed, a year ago, NASD regulators accused Mr. Langone's investment firm of violating their rules by receiving inflated commissions in connection with hot stock offerings.

What Hilfiger is being investigated for - possibly paying inflated commissions through a Hong Kong subsidiary - would have certainly helped to lower its overall tax rate, tax experts said.