The settlements include a deferred prosecution agreement to resolve criminal charges of wire fraud and attempted price manipulation, and will require Scotiabank to retain an independent compliance monitor for three years.
Scotiabank settled the criminal case with the U.S. Department of Justice, and three civil cases by the U.S. Commodity Futures Trading Commission for alleged illegal “spoofing” as well as compliance and supervision failures.
“The Bank fully reserved for the payments in these resolutions in prior quarters,” Scotiabank said in a statement. “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.”
Scotiabank, which informed staff it was closing its metals business in April, said the following month it had set aside C$232 million ($176.06 million) to cover costs related to the closure and for the investigations into its practices.
Scotiabank shares were down 0.5% at C$56.76 in early afternoon trading in Toronto, compared with little change in the Toronto stock benchmark.GSPTSE.
Spoofing involves placing trade orders with an intent to cancel them before they are executed, typically in connection with an effort to manipulate prices.
Authorities said that over more than eight years, four Scotiabank traders placed thousands of unlawful orders for gold, silver and other metals futures contracts to deceive other traders and benefit their employer.
JPMorgan Chase & CoJPM.N, the largest U.S. bank, has said in regulatory filings that its metals trading practices are also the subject of probes.