NatWest has agreed to pay US authorities -proximately $ 35 million after pleading guilty to running fraud programs in the US Treasury and futures markets.
The British bank pleaded guilty in a US federal district court in Connecticut on Tuesday in one wire transfer fraud case and one securities fraud case. As part of his criminal conviction, NatWest agreed to work with an independent compliance monitor and a three-year probation period.
Traders at NatWest, known as the Royal Bank of Scotland until last year, were involved in fraudulent deals, according to the US Department of Justice. In London and Connecticut, the programs took place between January 2008 and May 2014 in Treasury futures. Two other traders in Sing -ore carried out similar activities related to US Treasuries in cash in 2018, the ministry said.
The 2018 misconduct marked a “material breach” of a non-prosecution agreement a US brokerage subsidiary entered into in 2017 to admit that it had defrauded clients on mortgage-backed securities and secured loan commitments, according to the Justice Department. The bank was also on parole in 2018 after pleading guilty to manipulating the currency market in 2015, the DoJ said.
“As we previously warned, this will have dire consequences for a company that violates the terms of an agreement with the government,” said Lisa Monaco, US assistant attorney general. “Today’s confession of guilt by NatWest and the associated punishment show exactly that.”
The US Department of Justice told the Financial Times last month that it was preparing to take action against corporate misconduct. A potential target is companies that violated the terms of the deferred law enforcement agreements, said John Carlin, a senior official who worked on the department’s effort.
Robert Begbie, Chief Executive of NatWest Markets, said: “We deeply regret the past conduct of a small number of former employees that led to today’s admission of guilt and the agreement with the US Department of Justice [the US Attorney’s Office for the District of Connecticut] and look forward to resolving this matter. ”
The DoJ said traders were trying to take advantage of the generation of misleading information about supply and demand in treasury markets through “spoof orders” placed with the aim of being canceled before they were fulfilled.
“The spoof orders are designed to artificially push the prevailing market price up or down so that NatWest traders can trade more profitably based on these schemes,” the department said.
Paul Abbate, assistant director of the FBI, said, “NatWest’s plans were monstrous – spanning years and countries – and today’s conviction reflects that.”
The bank’s plea comes days after legal action was taken against it in the UK. Last week, NatWest Markets’ parent group paid a £ 264.8 million fine for violating anti-money laundering regulations between November 2012 and June 2016 and was convicted. 13 years after the takeover of RBS during the financial crisis, the bank remains majority-owned by the UK government.
Biden administration officials have promised a rigorous -proach to corporate violations. US authorities told Deutsche Bank earlier this month that they may have breached a criminal settlement after the German lender failed to notify the DoJ of an internal complaint in its wealth management department.