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Financial Institution Fraud

This archive displays posts tagged as relevant to fraud by or involving financial institutions. You may also be interested in the following pages:

Page 15 of 36

October 1, 2019

RBC Capital Markets, LLC, a registered futures commission merchant and subsidiary of the Royal Bank of Canada, will pay $5 million to resolve charges by the CFTC that RBC engaged in improper, fictitious, exchange for physical wash transactions (Wash EFPs), despite an earlier consent order between RBC and the CFTC regarding wash sales and fictitious transactions.  In the present action, the CFTC also found that RBC failed to meet its supervisory obligations, resulting in its failure to detect at least 385 Wash EFPs.  CFTC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Fraud in CFTC-Regulated Markets, Regulatory Violations,

October 1, 2019

Three firms will pay a total of $3 million to resolve claims that each violated the Commodity Exchange Act's prohibition on spoofing.  Morgan Stanley Capital Group Inc. will pay $1.5 million for engaging in spoofing the precious metals futures markets; Belvedere Trading LLC will pay $1.1 million for engaging in spoofing in the Chicago Mercantile Exchange E-mini S&P 500 futures market; and, Mitsubishi International Corporation will pay $400,000 for acts of spoofing silver and gold futures on the Commodity Exchange, Inc. markets.  CFTC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Fraud in CFTC-Regulated Markets, Market Manipulation and Trading Violations,

September 27, 2019

Advisory firms BMO Harris Financial Advisors Inc. and BMO Asset Management Corp. have agreed to pay over $37 million to resolve allegations that the companies violated the Investment Advisers Act by steering customers in their Managed Asset Allocation Program to more expensive investments from which the BMO advisor entities profited without disclosing this practice or the associated conflict of interest.  BMO will pay $29.73 million in disgorgement and prejudgment interest, along with a civil penalty of $8.25 million.  SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Regulatory Violations,

September 17, 2019

Raymond James & Associates, Inc., Raymond James Financial Services Advisors, Inc., and Raymond James Financial Services, Inc. will pay $15 million to resolve allegations that they improperly charged advisory fees on inactive retail client accounts without adequate suitability review, and charged excess commissions for brokerage customer investments in certain unit investment trusts that Raymond James recommend clients sell before their maturity, without adequate review of whether those recommendations were suitable.  SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Regulatory Violations,

September 16, 2019

Two subsidiaries of Prudential Financial, Inc., AST Investment Services Inc. and PGIM Investments LLC, will pay a civil monetary penalty of $5 million and disgorge $27.6 million to resolve charges that they failed to disclose a conflict of interest that arose between the subsidiaries, which served as investment advisors to 94 insurance-dedicated mutual funds, and Prudential, following a 2006 reorganization.  The reorganization was designed so that Prudential could receive certain tax benefits, but resulted in increased costs to the funds, which were not disclosed to the funds' boards of trustees of the beneficial owners of the funds' shares.  Prudential had previously reimbursed the funds for $155 million, and AST and PI self-reported to the SEC.  SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Regulatory Violations, Securities Fraud,

September 16, 2019

Two investment banks--Stifel, Nicolaus & Co., Inc. and BMO Capital Markets--pay $2.7 million and and $1.95 million in penalties, respectively, for failing to provide accurate data to the SEC. Broker-dealers must provide what is known as "blue sheet data," information about securities trading information that the SEC uses to monitor and investigate transactions. For a period of seven years, both entities failed to provide data and inaccurately reported information for several millions of transactions. The banks also admitted the SEC's allegations that they did not have proper mechanisms in place to verify the accuracy of their submissions. SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Market Manipulation and Trading Violations, Regulatory Violations, Securities Fraud,

August 16, 2019

Brokers Cantor Fitzgerald & Co. and BMO Capital Markets Corporation will pay, respectively, $647,000 and $3.9 million to resolve allegations that they marketed pre-released American Depositary Receipts (ADRs) when they should have known that the transactions were not backed by foreign shares.  SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Regulatory Violations,

June 27, 2019

State Street Bank and Trust Company will pay more than $88 million to the SEC to resolve charges that it overcharged its client mutual funds and other registered investment companies.  State Street served as custodian, and the clients agreed to reimburse State Street for specified custodial expenses that State Street incurred on their behalf.  However, State Street overcharged its clients, adding an undisclosed mark-up on the cost of sending financial transactions through the SWIFT network.  SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud,

June 18, 2019

Wedbush Securities, Inc., will pay more than $8.1 million to the SEC to resolve charges that the securities company improperly obtained pre-released ADRs from depositary banks when it should have known that neither the firm nor its customers owned the foreign shares needed to support those ADRs.  This practice inflates the total number of a foreign issuer’s tradeable securities.  The SEC further alleged that Wedbush failed to have adequate compliance and training.  The consent order requires the company to pay more than $4.8 million in disgorgement, approximately $800,000 in prejudgment interest, and a civil money penalty of more than $2.4 million.  SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Regulatory Violations,

May 10, 2019

Broker-dealer Banca IMI Securities Corp. pleaded guilty to criminal antitrust charges arising from a conspiracy to rig bids to borrow pre-release American Depository Receipts (ADRs) from one of the depository banks permitted to create ADRs.  The depository bank instituted an auction process for pre-release ADRs, and Banca IMI conspired with others to submit artificially low, sometimes identical, bids, to the bank.  Banca IMI will pay a criminal fine of $2 million.  DOJ

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Financial Institution Fraud, Securities Fraud,

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