A majority of private-equity firms inflate fees and expenses charged to companies in which they hold stakes, according to an internal review by the U.S. Securities and Exchange Commission (SEC), raising the prospect of a wave of sanctions by the agency.

More than half of about 400 private-equity firms that SEC staff have examined have charged unjustified fees and expenses without notifying investors, according to a person with knowledge of the SEC's findings who asked not to be named because the results aren't public. While some of the problems appear to have resulted from error, some may have been deliberate, the person said.

The SEC's review of the $3.5 trillion private-equity industry began after the 2010 Dodd-Frank Act authorized greater oversight of money managers, putting many firms under the agency's scrutiny for the first time. By December 2012, examiners had found that some advisers were miscalculating fees, improperly collecting money from companies in their portfolio, and using the fund's assets to cover their own expenses.