Toronto-based Royal Bank of Canada is being sued by American regulators for allegedly engaging in illegal futures trades, Bloomberg reports. The U.S. Commodity Futures Trading Commission is “seeking monetary penalties and an injunction against further violations.”
According to Bloomberg, RBC “is being sued by U.S. regulators over claims that [it] engaged in a series of illegal futures trades worth hundreds of millions of dollars to garner tax benefits tied to equities.” The article continues:
Toronto-based Royal Bank of Canada is being sued by American regulators for allegedly engaging in illegal futures trades, Bloomberg reports. The U.S. Commodity Futures Trading Commission is “seeking monetary penalties and an injunction against further violations.”
According to Bloomberg, RBC “is being sued by U.S. regulators over claims that [it] engaged in a series of illegal futures trades worth hundreds of millions of dollars to garner tax benefits tied to equities.” The article continues:
Canada’s biggest bank made false and misleading statements about “wash trades” from 2007 to 2010 in which affiliates traded among themselves in a way that undermined competition and price discovery on the OneChicago LLC exchange, the Commodity Futures Trading Commission said in a statement today. The allegations will be laid out in a complaint set to be filed in U.S. District Court (1071L) in New York, the CFTC said.
An Associated Press report published in Canadian Business today further explains the law suit’s motives:
The CFTC said the bank’s trading strategy was devised to gain Canadian tax credits on its holdings of U.S. and Canadian company stocks. The strategy was created and carried out by a group of executives at the bank. However, the agency’s suit didn’t name any individuals.