CHICAGO (AP) _ The head of Bank One Corp.'s mutual fund unit informed employees that the company has been ``told to anticipate enforcement action against Bank One's mutual fund adviser.''

In a memo posted Wednesday on the Chicago-based company's Web site, One Group Mutual Funds president Dave Kundert said the company hopes to avoid ``regulatory litigation and reach an amicable resolution with regulators over the next several months.''

The adviser is Banc One Investment Advisors, which manages about $175 billion in assets, according to the funds' Web site.

Securities and Exchange Commission regulators have been examining One Group and other mutual fund companies as part of an investigation into allegations of improper trading that was disclosed with subpoenas by New York Attorney General Eliot Spitzer.

Spitzer alleged Sept. 3 that hedge fund Canary Capital Management LLC engaged in after-market trading and market timing with several mutual fund families, including funds from One Group, Bank of America, Janus and Strong Financial Corp.

Spitzer said such trading may have cost investors billions.

That same day Canary and its managers agreed to pay $30 million in restitution for profits generated from improper trading, plus a $10 million penalty to settle charges brought by Spitzer. The hedge fund neither admitted nor denied wrongdoing in the settlement.

Neither One Group nor Bank One has been charged with any wrongdoing.

A spokeswoman told Dow Jones Newswires said the notice of a probable enforcement action came from the Securities and Exchange Commission, but she wasn't able to say if it was in the form of a so-called Wells Notice, which the SEC usually uses to inform subjects of potential enforcement actions.


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