NationsBank Pays Fine Over Investments

NationsBank Corp. agreed to pay $6.75 million in fines to settle regulators’ charges that it misled mostly elderly consumers by marketing volatile securities as safe banking products. NationsBank, which recently agreed to acquire BankAmerica Corp. for $65 billion, neither admitted nor denied wrongdoing under the settlement. The Charlotte, N.C.-based bank and an affiliated brokerage, NationsSecurities, were charged with marketing two proprietary closed-end bond funds that contained risky derivatives as if they were conservative banking products. The company misled investors in 1993 and 1994 by telling them that the funds were as safe as insured bank certificates of deposit and by describing them falsely as U.S. government bond funds, the SEC charged. The SEC fine is one of the largest ever imposed by the agency for deceptive brokerage sales practices, said SEC enforcement director Richard Walker.