Scotiabank Will Pay $127.4 Million to Settle Spoofing Claims

(Bloomberg) -- Bank of Nova Scotia agreed to pay $127.4 million to settle U.S. allegations that the company engaged in spoofing of gold and silver futures contracts, and made false statements to the government.

As part of the accord, Bank of Nova Scotia will pay a $17 million fine on Commodity Futures Trading Commission claims that it dramatically misrepresented the scope of the alleged wrongdoing. The bank made multiple false statements during the CFTC’s investigation of a spoofing case that was resolved in 2018 for $800,000, the agency said. The regulator said the new punishment reflects Bank of Nova Scotia’s lack of cooperation in the earlier probe and actions it took to conceal its misconduct.

“Entities seeking to cooperate with the CFTC, like all others that interact with the commission, must tell the truth,” James McDonald, the agency’s enforcement chief said in a statement. “When entities are not completely truthful, they will be penalized.”

Bank of Nova Scotia also agreed to a deferred prosecution agreement with the Justice Department tied to criminal charges of attempted price manipulation and wire fraud. Under the agreement, the Toronto-based lender will pay $60.4 million in fines, forfeiture, and restitution, which will be offset by the CFTC order. The bank also agreed to hire an independent monitor for three years.

“We understand that in order to maintain the trust of our stakeholders, we must adhere to trading-related regulatory requirements and compliance policies. We are committed to adhering to these standards,” the bank said in a statement.

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