The U.S. Justice Department announced Thursday that Bank of America Securities (BoAS) has resolved a criminal investigation tied to allegations that two of its former traders manipulated the U.S. Treasuries market through “spoofing.”
Spoofing is a form of market manipulation in which traders place orders they intend to cancel, creating a false impression of market activity to influence prices and prompt other investors to trade.
According to the Justice Department, the traders engaged in the scheme from November 2014 through April 2020, placing phony orders in U.S. Treasury futures to benefit their own positions.
As part of the settlement, prosecutors declined to pursue criminal charges against the bank. Instead, BoAS will disgorge approximately $1.96 million and establish a victim compensation fund with about $3.6 million to reimburse affected market participants.
