UK fund manager, Amvescap has had to pay a heavy price for its role in the Mutual Fund scandal. $450m to be exact. Furthermore they will have to forgo the interim dividend.

Last month, the company warned that the dividend would be cut if the settlement was above $225m. At the time it merely deferred the payment.

The dividend problem arises because Amvescap's banking agreements prevent the payment of more than a certain percentage of profits in dividends.

Ultimately the root of the problem is the mutual fund scandal. Fund managers would rapidly trade in and out of funds across time zones. Though not illegal, most firms would not want to be seen engaging in the activity.

US subsidiaries Invesco and AIM were found to have been involved. The settlement by them is the third highest in the scandal. Invesco will pay damages of $215m and a penalty of $110m. AIM will pay damages of $20-30m.

Over the next 5 years, the two groups will slash their fees by $75m.