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 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 , 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.”
