“FleetBoston Financial Corp., responding to civil fraud charges in the mutual-fund trading scandal, placed on leave eight portfolio managers and executives, including the co-presidents of its funds-distribution unit, according to a person familiar with the matter,” writes John Hechinger in today’s Wall Street Journal.

“Those who are on leave include James Tambone and Louis Tasiopoulos, co-presidents of Columbia Funds Distributor Inc., the sales and marketing arm for Fleet’s Columbia Funds, this person said.”

“On Tuesday, the Securities and Exchange Commission and the New York attorney general’s office alleged that senior executives at Columbia approved secret agreements to let sophisticated investors trade rapidly in mutual funds at the expense of ordinary shareholders. Regulators said traders engaged in $2.5 billion of rapid-fire transactions in at least seven mutual funds from 1998 to the summer of 2003 at Fleet’s Columbia Funds and its predecessors.”

“John Pappalardo, an attorney for Mr. Tambone, confirmed that his client had been placed on leave.”

” ‘As co-president, Mr. Tambone was strongly against disruptive market timing and implemented policies consistent with that position,’ said Mr. Pappalardo, who declined to discuss details of the complaints against Columbia Funds. Mr. Tasiopoulos couldn’t be reached for comment on the matter.”

“Messrs. Tambone and Tasiopoulos both joined what is now Columbia in 1997 from Boston neighbor Putnam Investments, the Marsh & McLennan Cos. unit that has also faced civil fraud charges in the mutual-fund scandal.”

“A FleetBoston spokesman declined to comment Wednesday. On Tuesday, Keith Banks, chief executive of Columbia Management Group, said the company had accepted about $147 million in market-timing money at peak moments, and that the damage to shareholders amounted to about $25 million. He said Fleet — which is soon to be acquired by Bank of America Corp. — plans to make restitution for that amount.”

“On Tuesday, Mr. Banks also said that all the executives referred to in the complaint — who were identified by title, though not by name — were on leave or had been dismissed. Fleet acquired the funds mentioned in the complaints through its November 2001 purchase of Liberty Financial Cos.’ asset-management unit. Mr. Banks said Fleet, which last year renamed all its funds Columbia, ended most of the improper trading by October 2002.”