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Sihpol settles SEC case for $200,000

WASHINGTON -- A New York state judge yesterday dismissed unresolved criminal charges against a former Bank of America Corp. broker, who agreed to pay a $200,000 fine to settle civil charges of defrauding mutual fund shareholders by allowing a favored customer to make illegal after-hours trades.

The moves ended the government cases against Theodore C. Sihpol, the first individual to go on trial as a result of an investigation of widespread trading abuses in the $8 trillion mutual fund industry.

At the request of prosecutors, Justice James Yates of state Supreme Court in Manhattan threw out the four criminal charges against Sihpol, including falsifying business records, on which a jury was unable to reach a verdict this spring. Sihpol was acquitted in June on most of the 33 counts against him, which included grand larceny.

The prosecutors made the request in light of Sihpol's settlement with the Securities and Exchange Commission and his statement to the court that he regretted his actions.

Sihpol, 38, also was banned for five years from the securities industry under the accord in which he neither admitted nor denied wrongdoing.

He remains a defendant in lawsuits brought by shareholders.

The SEC brought the charges against Sihpol in September 2003, alleging that he allowed hedge fund Canary Capital Partners to make $100 million by engaging in so-called late trading of mutual fund shares sold by Banc of America Securities.

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