21st Dec 2021 18:48
(Alliance News) - NatWest Group PLC said Tuesday its investment bank has pled guilty in US Federal Court to manipulating US Treasuries markets between January 2008 and May 2014.
NatWest Markets pled guilty to one count of wire fraud and one count of securities fraud in connection with historical spoofing conduct by former employees.
The lender also said the "spoofing" took place during three months in 2018.
"The 2018 trading occurred during the term of a non-prosecution agreement between NatWest Markets Securities and the US Attorney's Office for the District of Connecticut, under which non-prosecution was conditioned on NatWest Markets Securities and affiliated companies not engaging in criminal conduct during the term of the non-prosecution agreement. The relevant trading in 2018 was conducted by two NatWest Markets traders in Singapore and breached that non-prosecution agreement," NatWest said.
Under that deal, a subsidiary then known as RBS Securities Inc admitted its traders defrauded counterparties when dealing in mortgage securities and other loan-backed investments - using alleged manipulative trading, known as spoofing. In exchange, the US Justice Department agreed not to prosecute the bank, but has now said the 2018 trading violated the agreement.
As a result of the guilty verdict, NatWest will pay USD25.2 million in a criminal fines; about USD2.8 million of criminal forfeiture; and about USD6.8 million in restitution.
These amounts are fully covered by existing provisions, the lender noted.
It added: "In addition, NWM has also committed to compliance program reviews and improvements and agreed to reporting and cooperation obligations."
NatWest Markets Chief Executive Robert Begbie said: "We deeply regret the past behaviour of a small number of former employees which has led to today's guilty plea and the agreement with the US Department of Justice and US Attorney's Office for the District of Connecticut and are pleased to resolve this matter. The behaviour of these individuals was unacceptable and has no place in the bank we are today."
On Monday last week, the lender was fined more than GBP264 million after admitting breaching anti-money laundering regulations in the UK.
Bradford jeweller Fowler Oldfield deposited GBP365 million with the bank over a five-year-period, including GBP264 million in cash, some of which was brought into a branch in bin bags.
NatWest in October pleaded guilty to three offences under the Money Laundering Regulations 2007, between November 8, 2012 and June 23, 2016. It is the first time a financial institution has faced criminal prosecution by the Financial Conduct Authority under anti-money laundering laws in the UK.
By Paul McGowan; [email protected]
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