Bank of America to Pay $42 Million to Settle New York AG Probe in Electronic Trading
March 23 2018 - 12:19PM
Dow Jones News
By Allison Prang
Bank of America Corp.'s Merrill Lynch will pay $42 million to
the state of New York in connection with an investigation into the
firm's electronic-trading activity.
New York Attorney General Eric Schneiderman said Friday that
Merrill Lynch had secret agreements with certain firms, such as
Madoff Securities and Citadel Securities, to send them clients'
orders.
Those agreements were kept concealed from clients over a
five-year period, a press release said.
Merrill Lynch applied its "masking" strategy to more than 16
million client orders between 2008 and 2013, representing over 4
billion traded shares, the New York attorney general's office
said.
Mr. Schneiderman said the settlement was the "largest ever state
recovery in connection with an electronic trading
investigation."
"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," Mr. Schneiderman
said in prepared remarks.
A Bank of America spokesman said the settlement "primarily
relates to conduct that occurred as long as 10 years ago."
"At all times we met our obligation to deliver the best prices
to clients and about five years ago we addressed the issues
concerning communicating to clients about where their trades were
executed," the spokesman said.
Shares of Bank of America were down 2.4% in late morning
trading.
Write to Allison Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
March 23, 2018 12:04 ET (16:04 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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