The Securities and Exchange Commission on Wednesday announced the settlement with Banc of America Investment Services, which is paying a $1 million civil fine, and BACAP Distributors, which was fined $500,000. The companies, which also were censured, neither admitted nor denied wrongdoing in the settlement but did agree to refrain from future violations of securities laws.

The two units of the third-largest U.S. bank, which are based in Charlotte, N.C., also agreed to review their procedures for retaining e-mail communications and submit a report to the SEC.

The SEC alleged that from January 2001 through February 2004, Banc of America Investment Services and BACAP failed to preserve business-related e-mail messages sent and received by their employees for the required three years. The companies also lacked adequate systems and procedures for preserving e-mail records, the agency said.

"We have cooperated with regulators and we are pleased to have this issue behind us," Bank of America spokeswoman Shirley Norton said.