Bank One has agreed to settle US regulators' allegations that it allowed a hedge fund to make improper mutual fund trades. The Bank had violated federal securities laws by allowing hedge-fund manager Edward J. Stern to engage in "excessive" short-term trading – churning - to increase the bank’s fees, according to the regulators.

The settlement amounted to $50m in total made up of $10m in restitution and $40 million in civil penalties. The bank’s mutual funds arm, Banc One Investment Advisers, must also cut fees by $8m annually over five years.