NatWest Faces $35M Penalty in US for Treasury Market Manipulation

London-headquartered NatWest Markets has been slapped with $35 million in criminal fines for restitution and forfeiture by a United States court for its involvement in various fraudulent schemes for years.

In addition, the bank is facing three years of probation and has agreed to the imposition of an independent compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term monitor.
The court’s decision came after the bank pleaded guilty on Tuesday for running fraudulent schemes in markets for the US Treasury securities and futures contracts. In fact, it admitted to one count of wire fraud and one count of securities fraud.

Co-ordinated Fraud

According to the court documents, NatWest traders in London and the US state of Connecticut independently engaged in market manipulation schemes with US Treasury futures contracts between January 2008 and May 2014. Moreover, two other Singapore-based NatWest traders participated in similar schemes in 2018.

These traders placed ‘spoofing’ orders with an intention to cancel them before execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term, thus deceiving other market participants with false and misleading information. The orders were designed to artificially push the price up or down to benefit other NatWest traders to profit from it.

“As we have previously warned, there will be serious consequences for a company that breaches the terms of an agreement with the government. Today’s guilty plea by NatWest and the associated penalty show exactly that,” said the US Deputy Attorney General, Lisa O. Monaco.

In the United Kingdom, NatWest is facing a £264.8 million penalty for critical failures in its compliance with the country’s anti-money laundering regulations.

“NatWest is a repeat offender,” Leonard C Boyle, the acting US Attorney for the District of Connecticut, said. “In this instance, a criminal conviction was an appropriate penalty, given the conduct of NatWest’s supervisors, its compliance deficiencies, and its decision not to take the steps required to fulfil its agreement with this office that resolved a prior securities fraud scheme.”