NEW YORK, March 5 (UPI) -- Bank of America and New York Attorney General Eliot Spitzer are reported close to settling on a penalty in the mutual funds scandal.
BofA, accused of helping a hedge fund engage in illegal trading in mutual fund shares, would be the biggest financial institution to be penalized for its role in the widening scandal, the Financial Times reported.
The settlement will follow months of investigation into the bank's dealings with Canary Capital, a hedge fund that has agreed to pay $40 million for mutual fund trading abuses.
The decision to settle comes as the bank tries to persuade investors and regulators to approve its $48 billion takeover of FleetBoston Financial. Meanwhile, BofA is embroiled in several other scandals, including Parmalat and Adelphia.
FleetBoston has its own regulatory problems involving mutual fund trading abuses and improper trading at the New York Stock Exchange.
