NEW YORK (AP) – State and federal authorities filed criminal and civil charges Tuesday against a former employee of Bank of America over illegal mutual fund trades they say cost investors tens ofmillions of dollars.

Theodore Sihpol III, 36, surrendered to authorities was to be arraigned later Tuesday on felony charges of grand larceny and violations of securities law, said New York Attorney General Eliot Spitzer at a joint news conference with the Securities and Exchange Commission.

Sihpol’s lawyer, Don Buchwald, did not immediately return a phone call. A message left at Sihpol’s home in New Canaan, Conn., also was not immediately returned.

If convicted, Sihpol faces 8 to 25 years in prison.

Spitzer said the charges were the first of several expected in the mutual fund probe he announced earlier this month.

“This is a wide-ranging and continuing investigation likely to result in numerous other charges,” Spitzer said. “There is an effort by my office and the SEC to pursue what we believe to be a serious market problem.”

On Sept. 3, Spitzer announced that Canary Capital Partners, a multimillion dollar hedge fund that agreed to pay $40 million to settle charges that it had improper trading arrangements with several mutual fund companies, including Bank of America. Canary has admitted no wrongdoing and is cooperating with the investigation.

At the news conference, Spitzer accused Sihpol of being “at the center of the relationship” between Canary and Bank of America. The allegations involve “late trading,” in which investors are allowed to buy and sell funds at that day’s prices after the close of markets, setting them up to profit on market moving news that develops after the markets close. Ordinary investors who placed late orders to buy the funds would have to pay the next day’s closing price, losing out on that day’s gains.

“Our combined message is clear: Late trading is wrong, is clearly prohibited by the SEC” and wrongdoers will be punished, said Stephen Cutler, enforcement director for the SEC.

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Associated Press writers Hope Yen in New York and Michael Gormley in Albany contributed to this report.

State authorities filed criminal charges Tuesday against a former Bank of America broker allegedly at the center of illegal mutual fund trades they say cost investors tens of millions of dollars.

Theodore Sihpol III, 36, surrendered to authorities was to be arraigned later Tuesday on felony charges of grand larceny, said New York Attorney General Eliot Spitzer at a joint news conference with the Securities and Exchange Commission, which filed simultaneous civil charges alleging violations of securities law.

Sihpol’s lawyer, Don Buchwald, did not immediately return a phone call. A message left at Sihpol’s home in New Canaan, Conn., also was not immediately returned.

If convicted, Sihpol faces eight to 25 years in prison.

Spitzer said the charges were the first of several expected in the mutual fund probe he announced earlier this month.

“There is an effort by my office and the SEC to pursue what we believe to be a serious market problem,” he said.

On Sept. 3, Spitzer announced that Canary Capital Partners, a multimillion dollar hedge fund that agreed to pay $40 million to settle charges that it had improper trading arrangements with several mutual fund companies, including Bank of America. Canary has admitted no wrongdoing and is cooperating with the investigation.

At the news conference, Spitzer accused Sihpol of being “at the center of the relationship” between Canary and Bank of America. The allegations involve “late trading,” in which investors are allowed to buy and sell funds at that day’s prices after the close of markets, setting them up to profit on market moving news that develops after the markets close. Ordinary investors who placed late orders to buy the funds would have to pay the next day’s closing price, losing out on that day’s gains.

“Our combined message is clear: Late trading is wrong, is clearly prohibited by the SEC” and wrongdoers will be punished, said Stephen Cutler, enforcement director for the SEC.

The SEC is seeking civil penalties, recovery of funds and possibly to ban Sihpol from the securities industry for life.

Sihpol, who worked for Bank of America’s high-net worth group in New York, was fired last week along with several other employees who were associated with the firm’s mutual fund business. A Bank of America spokesman said the firm is cooperating fully with investigators.

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Associated Press writers Hope Yen in New York and Michael Gormley in Albany contributed to this report.