INTERNEWSTIMES.COM – Toronto-Dominion Bank (TD Bank) has agreed to pay over $20 million US to settle an investigation into fraudulent trading practices by a former employee. The investigation, conducted by American authorities, focused on the former employee’s use of “spoofing” tactics to manipulate the U.S. Treasuries market.
The bank entered into a three-year deferred prosecution agreement with the U.S. Department of Justice. This agreement resolves both criminal and civil probes related to the former trader, Jeyakumar Nadarajah, who was accused of placing hundreds of fraudulent orders amounting to billions of dollars in the secondary market for U.S. Treasuries.
The investigation revealed that Nadarajah’s actions created a false impression of market activity, ultimately influencing prices and potentially harming other market participants. This practice, known as “spoofing,” is illegal and can have significant consequences for both individuals and institutions involved.
As part of the settlement, TD Bank will pay a $12.5 million US criminal penalty to resolve civil investigations by the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority. Additionally, the bank will pay $4.7 million US in victim compensation and $1.4 million US in forfeiture.
This settlement serves as a reminder of the importance of regulatory oversight and the need for financial institutions to maintain robust controls to prevent such misconduct. It also highlights the potential consequences for those who engage in market manipulation, emphasizing the importance of ethical and legal trading practices. (Red)
