Bank of America settles with DOJ for $5.6 million in market manipulation case

Bank of America Securities has reached a settlement with the Department of Justice, agreeing to pay $5.6 million as part of a broader resolution related to alleged market manipulation. While specific details of the investigation were not disclosed, the payment marks a significant step in resolving regulatory issues for Bank of America Corporation, a financial institution with a wide range of operations across various sectors such as commercial banking, business and investment banking, wealth management, and market banking.

The settlement stems from a criminal investigation into market manipulation schemes by former employees at Bank of America Securities. The agreement includes a disgorgement of $1.96 million and a contribution of $3.6 million to a victim compensation fund. The investigation, which took place between November 2014 and April 2020, revealed evidence of market manipulation conducted by two traders on the bank’s U.S. Treasuries desk. One of the traders, Tyler Forbes, pleaded guilty in 2022 to the manipulation of U.S. Treasury securities prices through various tactics BofA Securities Inc. Resolves Criminal Investigation with Justice Department Pursuant to Part I of the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy. The traders engaged in activities such as placing orders without the intention of executing them, a practice commonly referred to as spoofing.

The resolution of this investigation was made possible by Bank of America’s timely and voluntary self-disclosure of the misconduct, as well as its full cooperation throughout the investigative process. Additionally, the bank took internal measures such as conducting a review, terminating the junior trader involved, and enhancing its surveillance programs. These steps demonstrate the bank’s commitment to compliance and regulatory standards, reinforcing the importance of upholding investor confidence.

This settlement represents a key milestone in Bank of America Corporation’s efforts to address regulatory issues and ensure adherence to legal standards. Operating in various financial sectors, the bank’s commitment to resolving the investigation underscores its dedication to upholding compliance requirements and regulatory expectations. By taking proactive steps to address the misconduct and cooperate with the authorities, Bank of America is working towards rebuilding trust and maintaining its reputation in the financial industry.