Bank of America Securities Settles Market Manipulation Case With DOJ, Shells Out Nearly $5,560,000 in Disgorgement and Victim Compensation

The investment arm of banking giant Bank of America (BofA) is settling a market manipulation case with the U.S. Department of Justice (DOJ), paying $5.56 million in disgorgement and restitution.

According to a new press release by the DOJ, BofA Securities, Inc. has agreed to resolve a criminal investigation that alleges the firm was manipulating the market, avoiding prosecution.

Authorities allege that between 2014 and 2020, two traders associated with BofA Securities’ U.S. Treasuries desk manipulated the secondary cash market while one of them manipulated the futures market by placing thousands of spoof transactions, or orders placed without the intent to execute them at the time.

Previous reports indicate that one of the traders, Tyler Forbes, pleaded guilty to manipulating U.S. Treasury security prices in 2022 and was sentenced to a prison term of time served plus two years supervised release, according to U.S. Securities and Exchange Commission (SEC) documents. He was facing a sentence of up to 20 years behind bars.

At the time, authorities said that Forbes’ main tactic was to make it appear as if the market had much more depth than it actually did by placing large spoof orders he intended to cancel on one side while at the same time placing genuine, smaller orders on the other side.

According to the DOJ, this method artificially raised or decreased the market’s price points, enabling Forbes to profit easily on his genuine transactions.

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