US Justice Department says Bank of America Securities resolves criminal investigation

WASHINGTON/NEW YORK (Reuters) - The U.S. Justice Department said on Thursday that Bank of America Securities resolved a criminal investigation involving two former employees, who had allegedly placed phony "spoof" trades to try to influence the U.S. Treasuries market.

Spoofing involves placing orders traders intend to cancel, hoping to create a false sense of market activity that moves prices in a direction they favor, and induce transactions that other traders would otherwise not make..

"As part of the resolution, the Justice Department has declined to prosecute BoAS, and BoAS will disgorge approximately $1.96 million and contribute approximately $3.6 million to a victim compensation fund it will establish and administer," the department said.

In 2023, Bank of America was fined $24 million by the Financial Industry Regulatory Authority for the same case.

The Justice Department's investigation found evidence that from November 2014 through April 2020, two BofA Securities traders engaged in a scheme to manipulate the futures market for U.S. Treasuries by entering spoof orders, it said on Thursday.

Collectively, these two former employees entered more than 1,000 suspected spoof orders during the relevant time period, it said.

The bank declined to comment.

(Reporting by Jasper Ward and Saeed Azhar; Editing by Costas Pitas and Mark Porter)

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