CFTC Settles with Scotiabank for $127M for Regulatory Violations

The US Commodity Futures Trading Commission (CFTC) has announced today the settlement of two separate enforcement actions against the Bank of Nova Scotia (BNS), operating as Scotiabank, for a total fine of $127.4 million.

The regulator charged the provisionally registered swap dealer for spoofing and violations of swap dealer compliances. Furthermore, It found the company making false statements to cover up both allegations.

The press release detailed that the BNS attempted manipulation and spoofing in gold and silver futures contracts in thousands of occasions in more than eight years. For this manipulative and deceptive conduct, it was fined $77.4 million.

In 2018, BNS was first penalized with a fine of $800,000 for the allegations, but the settlement amount was increased later as the regulator found that the company made multiple false statements to the CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term staff in the course of the investigation.

The total settlement fine for those charges include a $17 million penalty for making false and misleading statements to the regulatory staff and another $42 million for spoofing and attempted manipulation. Apart from that, the company has also been ordered to pay $6.62 million and $11.82 million for restitution and disgorgement respectively.

For the compliance rules violations, the CFTC settled with the swap dealer for $50 million.

“BNS’s compliance and supervision violations highlight the need for all swap dealers to have the right tone at the top—plus appropriate programs and incentives in place—to instill a meaningful culture of compliance among their personnel,” Joshua B. Sterling, Division of Swap Dealer and Intermediary Oversight Director, said.

Focusing on Data Analytics Analytics Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision-making. In the trading space, analytics are applied in a predictive manner in an attempt to forecast the price more accurately. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analy Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision-making. In the trading space, analytics are applied in a predictive manner in an attempt to forecast the price more accurately. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analy Read this Term

The US regulatory is boasting its improvements with the capabilities of data analytics as CFTC Chairman Heath P. Tarbert pointed out that the agency’s “ability to go through the electronic order book and look across markets has enabled the CFTC to not only spot misconduct but also to uncover false and misleading statements.”

Apart from these civil penalties, the BNS is also facing criminal charges from the Department of Justice and has agreed to pay $60.4 million in criminal fines, forfeiture, and restitution.