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Nations Funds' Parent Reaches Pact with Regulators

Bank of America is ordered to pay $375 million, replace its funds' board.

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After months of negotiations,  Bank of America (BAC), parent to the Nations Funds, settled market-timing and late-trading charges Monday with the Securities and Exchange Commission and the New York attorney general. Also settling with regulators Monday was  FleetBoston Financial (FBF), parent to the Columbia funds. FleetBoston and Bank of America are set to merge later this year.

Under the terms of the settlement, Bank of America agreed to pay $250 million in disgorgement and restitution and $125 million in fines after regulators found that the company allowed a New Jersey-based hedge fund to quickly trade in and out of Nations Funds and place illegal after-hours trades in Nations and other families' funds. The settlement also stipulates that Bank of America reduce the fees on its funds by $80 million over the next five years.

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Laura Pavlenko Lutton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.