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Fraudulent practices make Bank of America pay record USD 42 mn penalty

Bank of America Corp will pay a record USD 42 million penalty to New York state to settle an investigation into fraudulent practices related to its electronic trading division.


Reuters United States
Updated: 23-03-2018 20:12 IST
Fraudulent practices make Bank of America pay record USD 42 mn penalty

Image Credit: Reuters

Bank of America Corp will pay a record USD 42 million penalties to New York state to settle an investigation into fraudulent practices related to its electronic trading division.

New York Attorney General Eric Schneiderman, who announced the settlement on Friday, said Bank of America Merrill Lynch admitted that it systematically misled clients about how their stock orders were handled from March 2008 to May 2013.

He said the bank concealed it was routing client orders to so-called electronic liquidity providers such as Madoff Securities, Citadel Securities, D.E. Shaw, Knight Capital and Two Sigma Securities, even as it told clients it was processing the trades in-house.

Schneiderman said Bank of America went so far as to alter post-trade reports to conceal its "masking" scheme.

"Bank of America Merrill Lynch went to astonishing lengths to defraud its own institutional clients about who was seeing and filling their orders, who was trading in its dark pool, and the capabilities of its electronic trading services," Schneiderman said in a statement.

The attorney general said Bank of America also admitted to violating New York's Martin Act, a securities fraud law.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

COUNTRY : United States

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