The Bank of Nova Scotia will pay US$127.5-million to settle criminal and civil charges after investigators in the United States found Scotiabank traders illegally manipulated the price of futures contracts for precious metals over a period of eight years and the bank subsequently misled regulators about it.
Scotiabank has also agreed to oversight by an independent monitor for three years to ensure it addresses major failures the Commodity Futures Trading Commission uncovered in its compliance system.
The CFTC said it had grounds to “suspend or revoke” Scotiabank’s registration, and would do so if improvements are not made.
The settlement involves the largest civil penalty for “market spoofing” in U.S. history. Both civil and criminal fines are at the top end of the U.S. penalty scale owing to Scotiabank’s failure to disclose the wrongdoing and its attempts to mislead investigators, the CFTC and the U.S. Department of Justice (DOJ) said in statements on Wednesday.
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