Updated from 2:38 p.m. EDT
Bank of America
employees were fired following allegations the bank helped hedge funds carry out sure-thing bets in mutual fund shares.
Bank of America confirmed late Friday that Robert Gordon departed following the disclosure of the investigation by New York Attorney General Eliot Spitzer into the improper after-hours trading of some funds.
Also out is Theodore Sihpol, the broker who allegedly played a central role in the scandal, and Charles Bryceland, a branch manager for Banc of America Securities and one of Sihpol's supervisors.
Spitzer's office has alleged that BofA's Nations Funds mutual fund business, along with
, engaged in wrongful trading activity in mutual fund shares with
Canary Capital Partners
, a New Jersey hedge fund.
Brokers in Nations Funds are accused of helping Canary purchase shares in a mutual fund after the close of the trading, but at their 4 p.m. EDT price, a practice called late trading.
All four funds are alleged to have permitted Canary to engage in market timing, an arbitrage strategy that allows savvy traders to take advantage of the time differences between the closing of the U.S. markets and foreign exchanges.