A major banking giant is facing a hefty fine for defrauding the Treasury market. The US Department of Justice (DOJ) says TD Bank’s brokerage arm, TD Securities, has agreed to pay a $15.5 million penalty to settle criminal charges.
Spoofing Scheme Exposed
The DOJ alleges that a TD Securities trader, Jeyakumar Nadarajah, placed fake orders worth tens of billions of dollars to manipulate the market. This practice, known as “spoofing,” involves placing orders that are meant to be canceled, creating a false impression of demand or supply. Nadarajah is facing individual criminal charges.
The DOJ says Nadarajah used this technique to drive the prices of bonds in the secondary market to his advantage before executing actual trades.
Millions in Fines and Penalties
As part of the settlement, TD Securities will pay $4.7 million to market participants who were harmed by the bank’s actions.
The Securities and Exchange Commission (SEC) is also taking action against TD Securities, fining them $400,000 for disgorgement and $6.5 million in civil penalties. The SEC says the bank failed to properly supervise Nadarajah.
The Financial Industry Regulatory Authority (FINRA) is also imposing a $6 million fine on TD Securities for similar charges.
A Major Player in the Market
TD Bank is a major player in the US banking industry, ranking as the 10th-largest commercial bank with over $370 billion in assets.
This settlement highlights the importance of maintaining fair and transparent markets. The DOJ and other regulators are cracking down on illegal trading practices that undermine public confidence in financial markets.
