Report: BoA Working on $250M Scandal Settlement

March 11, 2004 ( - Bank of America Corp. may pay at least $250 million to settle charges that it allowed favored clients to late trade its mutual funds, according to an unidentified Reuters source.

The Charlotte, North Carolina-based bank may also agree to reduce fund fees, the Reuters source said. A settlement may be reached later this month but is reportedly not imminent.

If the rumored settlement comes to pass, the number three US bank would join Alliance Capital Management LP, MFS Investment Management and others in settling with regulators probing late trading, market timing, and certain sales practices in the fund industry.

New Yorkstate Attorney General Eliot Spitzer launched the regulatory probes last September, accusing Bank of America of helping the Canary Capital Partners LLC hedge fund illegally trade the bank’s Nations funds (See  Bank of America Will Pay Restitution to Mutual Fund Holders ). Canary later settled with Spitzer for $40 million.