New York Attorney General Eric Schneiderman said it has reached a record $42 million settlement with Bank of America Merrill Lynch over a fraudulent “masking” scheme in the bank’s electronic trading division. The bank told customers it was executing their orders in-house, but instead was actually routing them to ELPs (electronic liquidity providers), like Citadel, Two Sigma, Knight and others. The bank “masked” the deals by replacing the identity of the ELP with a code that indicated it was done by BofAML. “Bank of America Merrill Lynch went to astonishing lengths to defraud its own institutional clients about who was seeing and filling their orders, who was trading in its dark pool, and the capabilities of its electronic trading services,” Schneiderman said in a statement. The AG’s office found the bank had engaged in the practice starting in 2008, and that more than 16 million client orders were affected. Bank of America shares were slightly higher Friday, and have gained 32% in the last 12 months, while the S&P 500 has gained 13%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News