A former employee's penchant for excessive mutual fund trading has landed Bank of Hawaii in hot water with Securities and Exchange Commission, Reuters reports.

In 2002 and 2003, the unidentified bank employee excessively traded mutual funds to take advantage of price changes in the funds' underlying securities. Citing a report from the Honolulu Advertiser, the report said the trades exceeded an allowed number, a practice that can raise a fund's management costs.

The bank said it was notified of the SEC investigation via a Wells Notice, which typically means the regulator is contemplating civil action. The bank expects the investigation to cost about $3.8 million in legal fees.

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