The Bank of Nova Scotia has been slammed with a fine of $127.5m by the US Department of Justice and the Commodity Futures Trading Commission for manipulating metals market.
Out of that fine, $17 million is related to the firm deliberately misleading investigators within the early investigation that was carried out. The fines are the outcome of an investigation carried out on the metals trading division of the bank, which was shut down earlier this year.
According to the charges, from January 2008 to July 2016, on “thousands” of occassions, no fewer than four traders with Scotiabank ordered to buy and sell precious metals contracts which were then terminated before being filled, which is known as spoofing. Such an act can trigger false illusion of demand or supply to other traders and lead to manipulation of price action seen on the metals.
The fines will be paid by fund set aside by the bank when it first revealed that the winding down of its metals division, through which a total of $232 million was earmarked for potential penalties and the operation’s winding down.
