Scotiabank pays over $127m for commodities price manipulation
Bank of Nova Scotia (Scotiabank) has agreed to pay more than $127 million to resolve a series of US regulatory charges, according to Reuters.
The charges are over an alleged price manipulation scheme involving unlawful trading of precious metals futures contracts.
The settlements include a deferred prosecution agreement to resolve criminal charges of wire fraud and attempted price manipulation. It will require Scotiabank to retain an independent compliance monitor for three years.
Scotiabank settled the criminal case with the US Department of Justice, and three civil cases by the US Commodity Futures Trading Commission for alleged illegal “spoofing”.
It also faced charges of compliance and supervision failures.
“The Bank fully reserved for the payments in these resolutions in prior quarters,” Scotiabank says in a statement.
“In order to maintain the trust of our stakeholders, we must adhere to trading-related regulatory requirements and compliance policies. We are committed to adhering to these standards.”
Scotiabank, informed staff it was closing its metals business in April. It set aside CAD 232 million ($176.06m) to cover costs related to the closure and for the investigations into its practices.
Spoofing involves placing trade orders with an intent to cancel them before they are executed. It happens in connection with an effort to manipulate prices.
Authorities say that over more than eight years, four Scotiabank traders placed thousands of unlawful orders for gold, silver and other metals futures contracts to deceive other traders and benefit their employer.
JP Morgan Chase said in its regulatory filings that its metals trading practices are also the subject of probes.