Fund Times: Columbia, Nations Settle with Regulators
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The parents of Nations Funds and Columbia Funds this week promised to pay a total of $675 million in fines and fee cuts to settle abusive trading charges with state and federal authorities. Parent companies Bank of America (BAC) and FleetBoston Financial (FBF) are set to merge in April, so they negotiated a joint settlement.
Nations was one of the shops that ignited the fund scandal in September 2003 when New York Attorney General Eliot Spitzer accused the firm of permitting late-trading by hedge fund Canary Capital. The settlement brought yet another disturbing charge against Nations: Spitzer alleged that the fund boards themselves had signed off on special market-timing arrangements. Interestingly, it was the fund boards that were leading Nations' internal investigation. Because of that alleged misconduct, Spitzer required Nations to clear out all the old board members within 12 months.
Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.