Skip to comments.Exclusive: Bank of America's trading practices have been probed, filing shows
Posted on 01/25/2014 7:37:02 AM PST by Red in Blue PA
NEW YORK/WASHINGTON (Reuters) - The U.S. Department of Justice and the Commodity Futures Trading Commission have both held investigations into whether Bank of America (BAC) engaged in improper trading by doing its own futures trades ahead of executing large orders for clients, according to a regulatory filing.
The June 2013 disclosure, which Reuters recently reviewed on a website run by the securities industry regulator FINRA, sheds light on the basis for a warning by the Federal Bureau of Investigation on January 8.
The warning, in the form of an intelligence bulletin to regulators and security officers at financial services firms, said that the FBI suspected swaps traders at an unnamed U.S. bank and an unnamed Canadian bank may have been involved in market manipulation and front running of orders from U.S. government-owned mortgage giants Fannie Mae (FNMA) and Freddie Mac (FMCC).
Reuters has since learned that Bank of America's trading practices regarding Fannie and Freddie are the subject of probes, and that the investigations are ongoing.
Bank of America spokesman Bill Halldin declined comment when asked abut the investigations.
(Excerpt) Read more at finance.yahoo.com ...
The profits from front-running get passed on to the clients in the form of tighter spreads. If an institutional broker consistently provides bad pricing, it will be dropped. No big firm uses just one broker - the firm’s traders are always looking for a better price, whether buying or selling. This is just more populist shenanigans ginned up to extort money from the big banks for DOJ slush funds - money that will be recovered by the banks in the form of higher deposit minimums and transaction fees on the backs of small-time retail bank customers. Before these “reforms”, deposit minimums were negligible. Regulators are pricing working class people out of retail banking.
If the CFTC is looking into this, you know it’s pretty bad.
Jon Corzine is still a free man, so bad could be taken to mean political.
The American middle class is being bled dry.