Bank of America paying $675M in trade settlement

Associated Press

WASHINGTON — Bank of America Corp. is paying $675 million to settle state and federal charges of improper trades that hurt the returns of ordinary shareholders.

The settlement, agreed to last March and finalized yesterday, is part of an agreement between the banking giant's mutual-fund adviser company, brokerage and clearing firm and the Securities and Exchange Commission, the office of New York Attorney General Eliot Spitzer, the Federal Reserve and the U.S. Office of the Comptroller of the Currency.

The large settlement also covers the former FleetBank Financial Corp., which Bank of America acquired last year.

It was the latest enforcement action over alleged mutual-fund trading abuses in an industrywide crackdown that began in September 2003.

In the settlement, Bank of America agreed to pay a total $515 million and cut fees investors pay by $160 million. That deal was to settle regulators' charges of improper trading involving Nations Funds — one of the biggest penalties in the industrywide scandal.

Of the total $675 million amount, $375 million settled complaints against Bank of America companies and $140 million settled complaints against units of the former FleetBoston Financial. The remaining $160 million was agreed to in a settlement with Spitzer's office, from rate reductions of $32 million a year for five years.

Bank of America is "pleased to have this issue behind it," company spokesman Robert Stickler said in a statement.