BofA's Merrill Lynch Commodities Agrees To Pay $25M To DOJ
Zacks Investment Research | Jun 26, 2019 07:55AM ET
The U.S. Department of Justice (“DOJ”) fined Bank of America Corporation’s (NYSE:BAC) commodities trading unit — Merrill Lynch Commodities Inc — for unfair trading practices. Merrill Lynch Commodities has agreed to pay $25 million to settle the investigations.
The DOJ said in a statement that between 2008 and 2014, Merrill Lynch Commodities’ traders used faulty practices to deceive other participants in the precious metals futures market.
Per the statement, these traders tried to inject misleading and materially fraudulent information into the precious metals futures market by placing thousands of orders for precious metals futures contracts. However, just before execution, the traders used to cancel these orders.
The main objective behind this was to create a false impression of increased supply or demand within the market for precious metals futures. This would, in turn, persuade other traders to buy or sell metals futures contracts at quantities or prices that they would not have done otherwise.
Notably, Merrill Lynch Commodities also agreed to pay a civil monetary penalty of $11.5 million to the Commodity Futures Trading Commission in a separate settlement.
Though BofA has resolved quite a many litigation issues, it still faces investigations from several federal agencies for its business conducts in the pre-crisis period. Litigation issues are expected to lead to rise in legal expenses. Hence, higher costs will likely hamper the company’s bottom line in the near future.
Shares of BofA have gained 13.9% over the past six months compared with 11.3% growth of the Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.