NEW YORK — Fifth Third Bancorp accepted a cease-and-desist order from the Securities and Exchange Commission following an improper disclosure to investors, but was charged no penalty in the case because of its cooperation.

In May, Fifth Third had disclosed that some investors were informed before the general public that the bank intended to repurchase its trust preferred securities. The time lapse allowed investors to sell the trust preferreds in the open market at the then-current trading prices above $26, when Fifth Third was going to be repurchasing the securities at closer to $25 each.

Fifth Third said in May it was compensating any investors who had purchased the securities at the open trading prices after the partial disclosure was made.

The trading volume on the trust preferreds had spiked after the limited exposure, from fewer than 38,000 shares traded each day to over 2 million shares traded in two hours, the SEC said. Fifth Third noticed the spike and rushed out a public disclosure on the redemption in those few hours, the SEC said.

The Ohio bank said in a filing Wednesday it neither admitted nor denied the allegations but agreed not to violate disclosure rules.

In the SEC's settlement, the regulator says the bank violated the regulations but the SEC imposed no civil penalty because of Fifth Third's preemptive actions to correct the error.

Fifth Third and many other banks have been working to redeem the trust preferred securities because the new financial reforms don't count the securities as the top-level of equity for banks, making them less attractive to hold.

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