Royal Bank of Canada Accused of ‘Wash Sales Fraud’

RBC is based in Toronto and is one of Canada's biggest banks

Royal Bank of Canada (RBC), one of the country’s largest banks, has been accused of “multi-hundred million dollar” fraud over derivatives trading by a US regulator.

BBC, April 2, 2012

The Commodity Futures Trading Commission filed civil charges against RBC, saying the bank made “unlawful non-competitive trades” with itself.

Both sides of the so-called wash sales were controlled by RBC, the CFTC alleged.

RBC called the allegations “baseless”.

The Canadian bank said the trades had been vetted in advance by the CFTC and futures exchanges back in 2005 with no objections being lodged against them.

The trades in question are exchange-traded stock futures contracts.

The CFTC said that between June 2007 and May 2010, RBC traded hundreds of millions of dollars’ worth of narrow based stock index futures and single stock futures with two of its subsidiaries that RBC reported as “block” trades on electronic futures trading platform, OneChicago.

The regulator said that the trades were not negotiated “at arm’s length between the counter parties to the trades, as required by law”, but designed and controlled by a small group of senior RBC staff.

RBC said it would contest the charges in court.

Source:

http://www.bbc.co.uk/news/business-17593541

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About Pat Donworth

I express myself as teacher, writer, and consciousness explorer. These driving interests have manifested in my work/service as a university and hospital chaplain; a book and magazine writer/editor, and teacher and workshop leader. I designed this blog to be a portal that points to and assists awakening souls to implement, and make practical, the changes that will usher in a new world based on unity, compassion, and collaboration.
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