Bank Faces SEC Action Over Alleged Fraudulent Trading Practices
- TD Securities to pay over $6.5 million in charges related to spoofing
- Form of fraudulent trading known as spoofing involves flooding the market with fake orders
- Spoofing pushes stock prices up or down for more favorable execution prices
- SEC charged TD Securities for failing to supervise former head of Treasurys desk Jeyakumar Nadarajah
- Nadarajah made hundreds of illegal trades between April 2018 and May 2019
- TD Securities took action against Nadarajah five years ago, terminated his employment, and enhanced monitoring capabilities
TD Securities has agreed to pay over $6.5 million in charges related to spoofing, a form of fraudulent trading that involves flooding the market with fake orders to manipulate stock prices. The bank was also charged for failing to supervise Jeyakumar Nadarajah, former head of its Treasurys desk, who allegedly made hundreds of illegal trades between April 2018 and May 2019. Spoofing pushes stock prices up or down for more favorable execution prices. The bank consented to the entry of the SEC’s order, which required it to cease and desist from future violations, pay $400,000 in disgorgement, prejudgment interest, and a $6.5 million civil penalty. In response, TD Securities stated that it took action five years ago to report Nadarajah’s behavior to Finra, terminated his employment, and enhanced its monitoring and compliance capabilities. The bank values client trust and is committed to meeting their ongoing needs.
Factuality Level: 8
Factuality Justification: The article provides accurate information about the charges against TD Securities and Jeyakumar Nadarajah, as well as quotes from relevant sources such as the SEC Division of Enforcement’s Associate Director Mark Cave and a statement from TD Securities. It also includes details about spoofing and the consequences of such actions on market integrity. The article is not overly dramatic or opinionated, and does not contain any irrelevant information.
Noise Level: 3
Noise Justification: The article provides relevant information about TD Securities being charged with fraudulent trading activity and the actions taken by the SEC and Justice Department. It also includes a statement from TD Securities regarding their response to the situation. The article stays on topic and supports its claims with evidence from the SEC’s order. However, it could provide more analysis or context about the broader implications of this case for the financial industry.
Public Companies: TD Securities (TD)
Key People: Jeyakumar Nadarajah (Former head of the TD Securities desk responsible for trading U.S. Treasurys), Mark Cave (Associate Director, SEC Division of Enforcement)
Financial Relevance: Yes
Financial Markets Impacted: TD Securities
Financial Rating Justification: The article discusses a fine imposed on TD Securities for fraudulent trading activity and the impact on financial markets. It also mentions a related investigation by the Justice Department, which affects the company’s reputation and financial standing.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article and it does not meet the criteria for being an extreme event within the last 48 hours.
Deal Size: 65000000
Move Size: No market move size mentioned.
Sector: Finance
Direction: Down
Magnitude: Large
Affected Instruments: Stocks
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