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Background
In 2004 and 2005, multiple asset management firms entered into settlement agreements with the SEC concerning mutual fund trading practices that affected their proprietary funds. In February 2005, Columbia Management affiliates and Bank of America affiliates entered into separate agreements concerning mutual fund trading practices affecting the Columbia and Nations Funds, respectively.
Current Status
As required by these settlements, an independent distribution consultant (IDC) developed plans to allocate and distribute to investors the amounts paid as part of these settlements, subject to these plans being approved by the SEC. Although Bank of America has now integrated the Columbia and Nations funds under the “Columbia” brand, the regulatory settlements covered time periods prior to this integration. Therefore, there are two separate distribution plans: a Columbia distribution plan addressing the legacy Columbia funds and a Nations distribution plan addressing the legacy Nations Funds.
In April 2007, the SEC approved the Columbia Funds distribution plan. The IDC is currently managing the mailing of distribution checks to eligible mutual fund shareholders. The majority of distribution checks were mailed in several waves to eligible mutual fund shareholders during the 3rd and 4th quarters of 2007. The process will continue throughout 2008. The plan is available to review at the SEC’s Web site,
http://www.sec.gov/litigation/admin/2007/34-55598.pdf and is also accessible through the Columbia Funds Web site, http://www.columbiafunds.com/home.htm.
In December 2007, the SEC approved the Nations Funds distribution plan. The plan is available to review at the SEC’s Web site
http://www.sec.gov/litigation/admin/2007/34-57048-dp.pdf, and is also accessible through the Columbia Funds Web site, www.columbiafunds.com. Individual allocations are being calculated and distributions will commence in the near term. Under the methodology set forth in the distribution plan, investors owning one of the Nations mutual funds listed below, during the period 1999 to 2003, may be eligible to receive a distribution:
| Affected Fund (previous name) |
End State Name |
| Nations Bond Fund |
Renamed Columbia Total Return Bond Fund |
| Nations California Municipal Bond Fund |
Merged into Columbia California Tax-Exempt Fund |
| Nations Convertible Securities Fund |
Renamed Columbia Convertible Securities Fund |
| Nations Emerging Markets Fund |
Fund liquidated |
| Nations Government Securities Fund |
Merged into Columbia Federal Securities Fund |
| Nations Intermediate Municipal Bond Fund |
Merged into Columbia Intermediate Tax-Exempt Bond Fund, Columbia Intermediate Tax-Exempt Bond Fund subsequently renamed Columbia Intermediate Municipal Bond Fund |
| Nations International Equity Fund |
Renamed Columbia Multi-Advisor International Equity Fund |
| Nations International Value Fund |
Renamed Columbia International Value Fund |
| Nations LargeCap Index Fund |
Renamed Columbia Large Cap Index Fund |
| Nations Managed Index Fund |
Renamed Nations Large Cap Enhanced Core Fund in 8/03, subsequently renamed Columbia Large Cap Enhanced Core Fund |
| Nations Mid Cap Index Fund |
Renamed Columbia Mid Cap Index Fund |
| Nations Mid Cap Index Fund |
Renamed Columbia Mid Cap Index Fund |
| Nations Municipal Income Fund |
Merged into Columbia Tax-Exempt Fund |
| Nations Short-Term Income Fund |
Renamed Columbia Short Term Bond Fund |
| Nations Small Company Fund |
Renamed Columbia Small Cap Growth Fund II |
| Nations SmallCap Index Fund |
Renamed Columbia Small Cap Index Fund |
| Nations Strategic Growth Fund |
Renamed Columbia Large Cap Core Fund |
| Nations Value Fund |
Renamed Columbia Large Value Fund |
In addition, certain funds not affiliated with Bank of America identified in the Nations Funds Distribution Plan and their shareholders may also be eligible to receive a distribution.
Next Steps
The SEC approved the Nations Funds Distribution Plan on December 27, 2007. Individual allocations are being calculated by Rust Consulting and distributions are expected to commence in the near term. Rust Consulting was hired by the IDC to perform the calculations, allocate the settlement amounts and distribute them to eligible mutual fund shareholders, consistent with the terms of the SEC settlement and the distribution plan. Questions or concerns about the plan should be directed to www.nationsfairfund.com or to Rust Consulting at: 866-730-8148.
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