Two investment product units of Bank of America Corp. will pay $9.8 million to settle charges they inadequately disclosed potential conflicts of interest to clients, the Securities and Exchange Commission said Thursday.
The SEC had accused Banc of America Investment Services of failing to disclose that it favored affiliated mutual funds, and Columbia Management Advisors LLC was charged with "aiding and abetting, and causing certain" violations at the other unit.
The money will be distributed to affected clients. The units agreed to censures and cease-and-desist orders, and Banc of America Investment Services was required to review its method and disclosures for recommending and selecting mutual funds in discretionary programs.
Robyn Tice, a spokeswoman for B of A, said the settlement resolves a situation that occurred more than three years ago.
"We cooperated fully with the SEC," Ms. Tice said. "We have policies, procedures, and processes now in place that are reasonably designed to keep this from occurring again."
