The SEC today announced two settlements of market-timing cases. Banc of America Capital Management, Banc of America Capital Management Distributors and Banc of America Securities settled charges of permitting and facilitating market timing by large investors in certain Nations Fund mutual funds. Separately, Columbia Management Advisors, Columbia Funds Distributors and three former Columbia executives settled charges of allowing market timing in several mutual funds.
Banc of America Capital Management and its affiliates agreed to pay a total of $375 million, including restitution of $250 million, which will be distributed to the mutual fund shareholders hurt by the market timing. The Banc of America organizations also agreed to strengthen their oversight of compliance with federal securities laws.
Columbia Management Advisors and its affiliates agreed to pay a total of $140 million. That includes a $70 million civil penalty; the rest will be distributed to investors in its mutual funds. The Columbia organizations also agreed to undertake compliance and mutual fund governance reforms to enhance investor protections.
Both Banc of America and Columbia agreed to the settlements without admitting or denying guilt. Both actions were brought in conjunction with activities by Eliot Spitzer, New York attorney general. The Banc of America settlement was also made at the same time as similar actions by the Federal Reserve Bank of Richmond, Va., and the Office of the Comptroller of the Currency, which regulate banks.
