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The SEC plans to bring civil fraud charges against James Tambone and Robert Hussey for their role in allowing some investors to market time Columbia's mutual funds, a practice discouraged in its prospectuses because it erodes long-term returns. In previous cases against individuals, regulators have sought expulsion from the industry as a form of punishment.
In March 2004, three top Columbia executives left the firm a month after it was implicated in the scandal. The trio included Tambone, then one of the company's co-presidents, the firm's Chief Operating Officer Joseph Palombo and Co-President Lou Tasiopoulos. Three other former Columbia employees, including Palombo, agreed to settle market timing-related charges with the SEC, according to the Globe.
Columbia, formerly the asset management subsidiary of FleetBoston, came under the bank's supervision following the Bank of America/FleetBoston merger approved last spring. Meanwhile, the SEC is expected to announce a final agreement in the coming weeks in a $675 million settlement with Bank of America over improper trading in its mutual fund business, the newspaper said.