As part of the case, the SEC has charged five former executives of Columbia Mutual Funds, which BoA acquired through its acquisition of Fleet last year. They include
Peter Martin, James Tambone and Robert Hussey, who the SEC said entered into the market-timing arrangements, along with portfolio manager Erik Gustafson, who approved the transactions, and Chief Operating Officer Joseph Palombo, who looked the other way.
Although Tambone's and Hussey's cases are still pending, Martin has settled the charges by paying a $60,000 fine and agreeing to a 12-month suspension from association with any broker/dealer, investment advisor or investment firm, while Gustafson and Palombo will each pay $100,000. Gustafson is also suspended for 12 months, in his case from any investment advisor or investment firm, while Palombo is barred for six months from any such company, followed by another 12 months from serving as an officer or a director of an investment advisor.
BoA's units Banc of America Capital Management, BACAP Distributors and Banc of America Securities agreed to pay $375 million for allowing favored large investors to engage in market timing and late trading in 13 of the firm's Nations Funds mutual fund family.
The money will be distributed to the mutual funds and their shareholders that were harmed as a result of the actions, which occurred between July 2000 and July 2003.
In the second case, BoA's Fleet mutual fund unit will pay $140 million to settle market-timing charges against its Columbia Management Advisors and Columbia Funds Distributor. The Columbia market timing occurred between 1998 and 2003, the SEC said.
The $515 million settlement is part of a total $675 million settlement the SEC and New York Attorney General Eliot Spitzer announced last year.