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Bank of America Fined for Fraudulent ‘Masking’ Scheme

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Mar. 26 2018, Published 12:25 p.m. ET

Bank of America is fined

The New York Attorney General fined Bank of America (BAC) $42 million due to a fraudulent “masking” scheme in the bank’s electronic trading division. The bank misled customers by saying that it was executing their orders in-house. Instead, the bank routed the orders to electronic liquidity providers like Citadel Securities, Knight Capital, D.E. Shaw, Two Sigma Securities, and Madoff Securities. Bank of America applied its “masking” strategy to 16 million client trade orders between 2008 and 2013, which account for over 4 billion traded shares.

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JPMorgan Chase topped the list

According to data analytics firm Coalition, Goldman Sachs (GS) lost its place among the top three commodity-related revenue earners in 2017. For the first time, JPMorgan Chase (JPM) topped the list followed by Morgan Stanley (MS) and Citibank (C). According to Coalition, the commodity-related revenue at the 50 biggest investment banks (XLF) was $4.3 billion in 2017—the lowest level in more than a decade and down from $15.9 billion in 2008.

AIG is raising funds

AIG (AIG) is raising $2.5 billion in debt mainly to fund the acquisition of Bermuda-based Validus Holdings. In January, AIG revealed its intention to acquire Validus for $5.56 billion.

US mortgage rates rise

Average long-term US mortgage rates are gradually rising. Freddie Mac data revealed that in the past 11 weeks, mortgage rates increased in ten weeks. Last week, the 30-year fixed mortgage rate settled at 4.5%—compared to 4.2% a year ago.

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