The bank, its Asset Management Group, and three current executives and one former executive have received "Wells notices," which indicate the SEC plans to take civil action against the parties. Wells notice recipients have a chance to respond to the staff of the SEC before any formal recommendation is made by the staff to the full commission.

The notices stem from an investigation into alleged excessive and late market trades at Pacific Capital Funds, a mutual fund managed by the Asset Management Group. The company said the allegations concern trades made during 2002 and 2003 by an unnamed former employee, who was later fired.

The employee may have increased the value of his retirement account by about $110,000 with the improper trades, the company said.

Early last year the bank said it discovered the employee had engaged in "market timing" with one of the Pacific Capital Funds, for which the bank acts as an investment adviser.

Market timing involves frequent short-term trades to take advantage of price changes in a fund's underlying investments. The practice is not illegal, but some mutual-fund policies limit the number of transactions a person can perform and the former employee exceeded that number, the company said.

The company said there was no suggestion those served with notices profited from the alleged actions, and that it has agreed to reimburse the fund for losses and legal costs.

Bank of Hawaii reaffirmed its annual earnings guidance of $176 million to $179 million, and noted that it would take a $3.8 million pretax charge in the third quarter related to the probe. Analysts surveyed by Thomson Financial estimate full-year net income of $180.9 million.