Five Former BoA Employees Charged in Market Timing Probe

February 9, 2005 ( - Five former employees of Bank of America's (BoA) mutual fund unit were charged with trading abuses Wednesday and the bank finalized a settlement with regulators in relation to the ongoing mutual fund trading scandal.

As was expected, Peter Martin, Erik Gustafson, Joseph Palombo, James Tambone and Robert Hussey, who worked for the Columbia Mutual Fund Advisor and Distributor unit that was part of FleetBoston before being taken over by BoA, have all been charged (See SEC Set to Announce Market Timing Action against BoA ).

Martin, Tambone and Hussey have been charged with entering into market timing agreements. Gustafson approved the transactions made following the agreements and Palombo ignored red flags that should have indicated such trades were occurring, according to Reuters.

Martin, Gustafson and Palombo have all settled with the SEC, while the other two are awaiting more charges.

The BoA settlement will cost the company $515 million – $140 million of it coming from the Columbia unit. The total settlement, made in conjunction with New York Attorney General Eliot Spitzer last March, will cost $675 million, the largest yet in connection with the scandal.

The SEC news release about the latest developments is  here .