The former chief executive of Invesco Funds Group Inc.’s, Raymond Cunningham, will pay a US$500,000 civil penalty to settle charges stemming from his role in the company’s market timing trading violations.

Invesco and two other mutual-fund units of London-based Amvescap LLC will pay $375 million to settle Securities and Exchange Commission charges of helping favored investors engage in the improper trading, the SEC said.

A tentative deal was announced last month announced by New York state attorney general Eliot Spitzer in early September, but Cunningham’s penalty wasn’t formalized until today. The deal was jointly negotiated by the SEC, and the attorney generals of New York and Colorado.

The settlement requires Invesco to return US$215 million to shareholders and to pay US$110 million in civil penalties. AIM Advisors Inc. and AIM Distributors Inc. will return US$20 million to shareholders and pay a total US$30 million in civil penalties.

Last month, Invesco and AIM Investments said they had reached a tentative deal to pay US$450 million in fines and restitution to settle allegations with state and federal regulators. The additional US$75 million in the original deal is intended to reduce mutual-fund fees charged to investors for the next five years.

In September the companies said a separate pact with Colorado regulators would require Invesco to pay an additional $1.5 million to cover attorneys fees and investor education. Neither firm admitted nor denied the civil fraud charges.

The Amvescap deal is one of the largest settlements in the fund-trading scandal that has swept through the US$7.5 trillion U.S. mutual-fund industry over the past year.

The SEC also issued an order finding that Invesco, AIM Advisors, and AIM Distributors violated the federal securities laws by facilitating widespread market timing trading in mutual funds with which each entity was affiliated.

The SEC found that, as Invesco’s president and CEO, Cunningham was responsible for and approved Invesco’s undisclosed market timing program.