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BOA Investigated by DOJ
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Bank of America Corp is being investigated by the U.S. Department of Justice as well as the Commodity Futures Trading Commission. Ultimately, “handling of future trades” is what is being investigated. Specifically, the Western District of North Carolina’s U.S. Attorney’s Office is “examining whether it was proper for the swaps desk to execute futures trades prior to the desk’s execution of block future trades on behalf of counterparties.”

While spokesmen for the bank declined to comment, Bloomberg notes that whether or not accurate information was provided to the DOJ is a question. At the same time, the CFTC is conducting their own probe into the matter. The U.S. Attorney’s Office in Charlotte as well as representatives from the Bank of America Corp both declined to comment.

  
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The issue being looked into considers that some bank employees “may have profited by trading ahead of Fannie Mae and Freddie Mac swap orders.” Ultimately the duty of the fiduciary as was laid to the side by certain parties. Trading ahead is an act in violation of the rules of the New York Stock Exchange. It happens when a party trades securities before they execute trades on behalf of their client. This act by nature puts customers at a disadvantage and those actors who do this deed are essentially taking advantage of their information privileged position.

image credit: www.justice.gov

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