Thursday, February 10, 2005

Two More Mutual Fund Market Timing Settlements

The SEC entered into settlements with two more mutual fund companies regarding improper market timing by favored customers that effectively permitted the customers to bypass the 4:00 p.m. settlement time and engage in late trading to the detriment of other investors in the funds.  The settlements by Bank of America (for the mutual funds marketed by NationsBank) and Columbia Management Advisors (Coumbia Funds) are available here and here.  Bank of America agreed to disgorge $250 million and pay a civil money penalty of $125 million, bringing its total to $375 million (in addition to other administrative remedies), while Columbia will disgorge $70 million and pay a civil money penalty of $70 million.  Ouch!  The Commission also entered into settlements with individual managers at Columbia (see filings here against Gustafson, Palombo, and Martin). (ph)

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