BofA Securities has agreed to settle a U.S. Justice Department investigation into alleged market manipulation by two of its former traders, avoiding prosecution under the department’s Corporate Enforcement and Voluntary Self-Disclosure Policy.
BofA Securities Resolves U.S. Market Manipulation Probe Without Prosecution
The bank will disgorge $1.96 million and contribute around $3.6 million to a victim compensation fund.
The resolution follows a criminal probe into schemes carried out between November 2014 and April 2020, when two traders on BofA’s U.S. Treasuries desk manipulated the secondary market.
One trader also entered more than 1,000 “spoof” orders in the U.S. Treasuries futures market. Spoofing involves placing orders without intent to execute, in order to distort prices.
One of the traders, Tyler Forbes, pleaded guilty in April 2022 to manipulating Treasury prices.
The Justice Department said it took into account BofA’s voluntary self-disclosure, cooperation, and remediation efforts.
These included terminating the trader involved, reviewing trading across its Treasuries desk, upgrading surveillance and compliance systems, and conducting external testing of internal controls.
The report states that the claims settled remain allegations, with no finding of liability.
