TD Bank to pay more than US$20M over ‘spoofing’ charges
The U.S. broker-dealer unit of Toronto Dominion Bank TD.TO has agreed to pay over $20 million under a deal with U.S. authorities to settle charges that it manipulated the U.S. Treasuries market.
TD Securities USA, part of Canada’s second-largest bank, admitted to spoofing the U.S. Treasuries market as part of a deal with the U.S. Justice Department that will end a long-running probe into manipulation, according to a court filing on Monday. TD Securities also settled related civil charges from the Securities and Exchange Commission, the SEC said separately.
In addition to the manipulation charges, the bank was charged with failing to supervise the then-head of its U.S. Treasuries trading desk, authorities said.
Between April 2018 and May 2019, the then-employee sought out better trades in the U.S. Treasury cash securities market by entering orders he did not intend to execute in a tactic known as “spoofing,” authorities said.
U.S. authorities have aggressively gone after the practice, which is designed to create a false appearance of demand.
Under the terms of TD’s agreement, prosecutors will hold off prosecuting the firm so long as it complies with the three-year deal and overhauls compliance. Based on the company’s remediation of the issues, the DOJ decided against installing a third-party monitor to police compliance.
The bank will pay a $12.5 million criminal penalty to resolve civil investigations by the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority.
That comes on top of an approximately $9.5 million criminal penalty related to the agreement. The bank has also agreed to pay $4.7 million in victim compensation and $1.4 million in forfeiture.
The settlement comes as the
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