A Toronto-based bank has been caught rigging precious metals futures prices, landing it a $60.4 million penalty.
The Bank of Nova Scotia (Scotiabank) entered into a deferred prosecution agreement (DPA) in connection with a price manipulation scheme that involved thousands of episodes of unlawful trading activity by four traders in the precious metals futures contracts markets.
Scotiabank agreed to the imposition of an independent compliance monitor, and will pay over $60.4 million in a criminal monetary penalty, criminal disgorgement, and victim compensation, with part of the criminal monetary penalty credited against payments made to the Commodity Futures Trading Commission (CFTC) under a separate agreement with the CFTC.
“For over eight years, Scotiabank traders placed thousands of orders for precious metals futures contracts in an attempt to manipulate prices for their own and the bank’s benefit and to deceive other market participants,” said Chief Robert A. Zink of the Justice Department’s Criminal Division, Fraud Section.
According to admissions and court documents, between approximately January 2008 and July 2016, four precious metals traders located in New York, London and Hong Kong engaged in fraudulent and manipulative trading practices in the markets for gold, silver, platinum, and palladium futures contracts.
“The resolution announced requires Scotiabank to pay a substantial penalty and places them under watch by an independent compliance monitor,” said U.S. Attorney Craig Carpenito for the District of New Jersey. “For the markets to work fairly, everyone needs to be able to make trading decisions with consistent, accurate information.”
Scotiabank’s actions were designed to lead others to trade in ways they never would have without what was believed to be legitimate market activity, said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office.
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Key Facts
- State: Federal
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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