`Action' expected against Bank One fund adviser

Fraud investigations continuing in industry

November 28, 2003|By Mark Skertic | Mark Skertic,CHICAGO TRIBUNE

CHICAGO - Bank One Corp. expects its mutual fund adviser will face "enforcement action" by regulators, the head of the bank's mutual fund group said.

"As expected, we have been told to anticipate enforcement action against Bank One's mutual fund adviser," Dave Kundert, president of the company's One Group Mutual Funds, said Wednesday.

The company's mutual fund adviser, money management firm Banc One Investment Advisors Inc., is listed as an "indirect subsidiary" of Bank One Corp.

"However, we are optimistic that we can avoid regulatory litigation and reach an amicable resolution with the regulators over the next several months," Kundert said.

He also said that One Group, which had $101 billion in assets, continues to cooperate with the Securities and Exchange Commission and New York Attorney General Eliot Spitzer; both have begun investigations into allegations of fraud in the mutual fund industry.

Kundert's statement was posted on the bank's Web site and filed with the SEC. It did not say whether Bank One expects the SEC or Spitzer to take action.

In September, One Group was among four mutual fund groups Spitzer accused of improperly aiding the Canary Capital Partners LLC hedge fund. After an internal review, Chairman Jamie Dimon acknowledged that beginning in mid-2002, and continuing for 11 months, Canary was given permission to trade 11 One Group funds more frequently than other customers.

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