Scotiabank to pay $127.4M to settle charges related “massive” spoofing scheme

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Scotiabank
Source: Scotiabank website

The Bank of Nova Scotia (operating as Scotiabank) agreed to pay a total of $127.4 million to settle the charges filed against it by the U.S. Commodity Futures Trading Commission (CFTC) and the Department of Justice (DOJ).

Scotiabank is a global banking and financial services firm based in Canada. It is a provisionally registered swap dealer registered with the CFTC.

Allegations against Scotiabank

The CFTC and the DOJ alleged that Scotiabank engaged in manipulative and deceptive conduct such as attempted spoofing in gold and silver futures contracts for more than eight years.

In 2018, the CFTC originally penalized Scotiabank $800,000 for spoofing in the precious metals markets.

The U.S. regulators also alleged that the Canadian banking and financial services firm submitted materially incomplete and false statements during the investigation into the unlawful trading practices of its four traders,

The four traders allegedly manipulated precious metals futures contracts by “injecting false and misleading information…to trick other market participants into reacting to the apparent change and imbalance in supply and demand…” for the benefits of the Bank of Scotia and themselves.