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C$89.33 -2.0  -2.2%

Last Trade - 29/05/20

Sector
Financials
Size
Large Cap
Market Cap £76.70bn
Enterprise Value £215.81bn
Revenue £27.19bn
Position in Universe 1st / 2659

U.S. regulator fines RBC Capital Markets $5 mln for unlawful trades

Thu 3rd October, 2019 3:53pm
By Nichola Saminather
    TORONTO, Oct 3 (Reuters) - RBC Capital Markets has been
fined $5 million (C$6.7 million) by the U.S. Commodities and
Futures Trading Commission for failures that resulted in
unlawful trades and other violations between at least late 2011
and May 2017.
    Between December 2011 and October 2015, RBC Capital Markets
(RBCCM), a unit of Canada's biggest lender, Royal Bank of Canada
  RY.TO , engaged in at least 385 non-competitive, fictitious or
unlawful trades, the CFTC said in a statement on its website https://www.cftc.gov/PressRoom/PressReleases/8034-19
 on Tuesday. 
    The CFTC said 217 of the trades took place after the entry
of a consent order in December 2014 of a CFTC enforcement action
against RBC for fictitious transactions. 
    "The order finds that RBCCM had actual notice of the
December 2014 injunction against RBC prohibiting wash trading,
yet the Wash EFPs (exchange for physical) continued at RBCCM,"
according to the statement. 
    In a wash trade, an investor simultaneously buys and sells
the same financial instruments, creating misleading activity.   
 An exchange for physical is an agreement to trade a futures
contract for the underlying asset. 
    "This matter has been resolved and we continue to remain
committed to complying with regulatory requirements," a
spokeswoman for RBC said by email on Thursday. "We have enacted
a number of measures to prevent this issue from recurring,
including improved surveillance and additional training."
    Those involved believed such moves were allowed, and a
compliance officer did not respond to inquiries on whether the
trades were appropriate until at least May 2015, according to
CFTC.
    And while RBCCM reported the trades to the CFTC shortly
before disclosing them in its 2015 compliance report, it failed
to respond fully and on time to document requests and subpoenas
from CFTC staff, the regulator said. RBCCM also tried to
dissuade the regulator's staff from examining RBC's role in the
trades. 
    The CFTC also found RBCCM, which was responsible for
handling RBC's futures transactions in the United States, failed
to "adequately implement a reasonable supervisory system
overseeing its futures transactions." 
    
    (1 Canadian dollar = $0.7495)

 (Reporting By Nichola Saminather; Editing by Steve Orlofsky)
 ((Nichola.Saminather@thomsonreuters.com; +1-416-687-7604;))
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