BofA to Pay $2.5M to Settle Trading Activity Investigation
Bank of America Corporation BAC has agreed to pay $2.5 million to the federal government to settle an investigation conducted by the United States into its trading activities, going by Charlotte Business Journal. The investigation, between 2009 and 2010 was led by the FBI’s Charlotte Division and the Federal Housing Finance Agency, Office of Inspector General, Northeast Region.
There were claims that some of BofA’s traders on the swaps desk in New York had used insider information to trade ahead of block futures trades with counterparties.
Upon investigating, the bank confessed that at least three of its traders overheard calls between large counterparties and its sales people about block futures trades that were going to be executed.
However, without disclosing the same to the company, they used the information to hedge risks that were projected to arise from the respective block trades.
Although the settlement between BofA and the United States was reached in 2015, it was announced on Friday, Sep 22, 2017, by Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
Along with this announcement, the U.S. Commodity Futures Trading Commission (CFTC) also announced its settlement with Merrill Lynch regarding an investigation that it held to see how the latter failed to keep records of its trading activities.
Rose said, “The settlement underscores the expectation that everyone, from Wall Street to main street, act honestly and ethically in their financial transactions.” She added, “The financial system depends on the integrity of everyone involved in it. The settlement reinforces our expectation that firms effectively monitor their employees and deal candidly with all regulators and law enforcement agencies.”
While investigations are common in the banking universe, mentioned below are a few stocks from the space that are worth a look for some good reasons.
M&T Bank Corporation’s MTB shares have gained more than 30% in a year’s time. Its Zacks Consensus Estimate for current-year earnings has been revised upward in the last 60 days.
The PNC Financial Services Group, Inc.’s PNC Zacks Consensus Estimate for current-year earnings has also been revised up in the last 60 days. Its share price has increased more than 45% in the last 12 months.
State Street Corporation’s STT shares have gained nearly 35% in a year and its earnings estimates have been revised upward in the last 60 days.
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PNC Financial Services Group, Inc. (The) (PNC) : Free Stock Analysis Report
M&T Bank Corporation (MTB) : Free Stock Analysis Report
State Street Corporation (STT) : Free Stock Analysis Report
Bank of America Corporation (BAC) : Free Stock Analysis Report
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