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Tuesday February 15, 07:46
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Bank of America Paid Off
(by Mark Riley)
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The Securities and Exchange Commission brought an action against two former employees of FleetBoston bank, which has been a part of Bank of America since last year. James Tambown and Robert Hassy face conspiracy with the investors and criminal-fraud charges for making fund shares bargains.
The SEC and Eliot Spitzer, New York State Attorney General, accused the third-biggest bank of the USA that its investment funds subsidiaries allowed some investors to participate in short-termed share deals and so called “late sales”.
Bank of America agreed to pay $515 million for the damages and fines and to reduce brokerage fees for the shareholders of its funds, which will reduce the bank’s in the amount of $160 million over five years period. So it will cost Bank of America $675 million total to settle the scandal.
The Bank of America seems to be in for long investigations of its staff’s activities.
The SEC announced Wednesday the settlement of the claims to three more former employees of FleetBoston: Peter Martin, who arranged short-termed deals, Erick Gustaffson, who granted permission to the investors for four such deals and Joseph Palombo, former Columbia Management Advisors operating activities manager, who “didn’t notice” any fraud during these shares sale.
Martin agreed to reimburse $10 000 he raised as a result of his artifices and to pay a $50 000 fine. Both Gustaffson and Palombo will pay a $100,000 fine. All three are prohibited to work for any brokerage or investment firms.
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