{"id":2157,"date":"2018-03-24T19:18:46","date_gmt":"2018-03-25T00:18:46","guid":{"rendered":"https:\/\/www.institutionalinvestorsecuritiesblog.com\/?p=2157"},"modified":"2022-03-22T15:58:41","modified_gmt":"2022-03-22T20:58:41","slug":"bank-america-pay-42m-new-york-fraudulent-masking-involving-electronic-trading","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/bank-america-pay-42m-new-york-fraudulent-masking-involving-electronic-trading\/","title":{"rendered":"Bank of America to Pay $42M to New York Over Fraudulent \u201cMasking&#8221; Involving Electronic Trading"},"content":{"rendered":"<p>\t\t\t\tBank of America Merrill Lynch (BAC) will pay a $42M penalty to New York State to settle allegations that it engaged in <a href=\"https:\/\/www.investorlawyers.com\/investor-claims\/brokerage-firm-misconduct\/\" target=\"_blank\" rel=\"noopener noreferrer\">fraudulent practices <\/a>involving electronic trading services.<\/p>\n<p>According to a press release issued by New York Attorney General Eric Schneiderman, the bank admitted that over five years, it \u201csystematically&#8221; hid from clients that it was \u201csecretly routing\u201d their equity securities orders to electronic liquidity providers, including Knight Capital, Citadel Securities, Two Sigma Securities, D.E. Shaw, and Madoff Securities, which then executed the transactions.<\/p>\n<p>Bank of America Merrill Lynch, which is Bank of America\u2019s corporate investment banking division, had \u201cundisclosed\u201d agreements with these providers. Its \u201cmasking\u201d strategy was used in more than 16 million client orders that involved over 4 billion shares that were traded.<\/p>\n<p>According to the probe by Schneiderman office, and Bank of America Merrill Lynch\u2019s own admission, starting in 2008, the corporate investment banking division purposely took steps to hide that it was sending a number of equity securities orders made by clients to the electronic liquidity providers. Bank of America Merrill Lynch told investors that the orders were executed \u201cin-house.&#8221;<\/p>\n<p>Meantime, it committed fraud by modifying its electronic trading systems to \u201cautomatically doctor\u201d the trade confirmation that clients received after these other firms executed the transactions. Internally, Bank of America Merrill Lynch called this action \u201cmasking,\u201d which consisted of replacing the electronic liquidity provider\u2019s identity with a code to make it appear as if a trade execution had taken place through the bank instead.<\/p>\n<p> <a href=\"https:\/\/www.investorlawyers.com\/blog\/bank-america-pay-42m-new-york-fraudulent-masking-involving-electronic-trading\/#more-2157\" class=\"more-link\">Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bank of America Merrill Lynch (BAC) will pay a $42M penalty to New York State to settle allegations that it engaged in fraudulent practices involving electronic trading services. According to a press release issued by New York Attorney General Eric Schneiderman, the bank admitted that over five years, it \u201csystematically&#8221; hid from clients that it [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3751,3752],"tags":[3015,3016],"class_list":["post-2157","post","type-post","status-publish","format-standard","hentry","category-bank-of-america","category-financial-firms","tag-electronic-trading","tag-masking"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Bank of America to Pay $42M to New York Over Fraudulent \u201cMasking&quot; Involving Electronic Trading | SSEK Law Firm Blog<\/title>\n<meta name=\"description\" content=\"Bank of America Merrill Lynch will pay a $42M penalty to settle allegations that it engaged in fraudulent practices involving electronic trading services.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/bank-america-pay-42m-new-york-fraudulent-masking-involving-electronic-trading\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Bank of America to Pay $42M to New York Over Fraudulent \u201cMasking&quot; Involving Electronic Trading | SSEK Law Firm Blog\" \/>\n<meta name=\"twitter:description\" content=\"Bank of America Merrill Lynch will pay a $42M penalty to settle allegations that it engaged in fraudulent practices involving electronic trading services.\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Shepherd Smith Edwards &amp; Kantas, LLP\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Bank of America to Pay $42M to New York Over Fraudulent \u201cMasking\" Involving Electronic Trading | SSEK Law Firm Blog","description":"Bank of America Merrill Lynch will pay a $42M penalty to settle allegations that it engaged in fraudulent practices involving electronic trading services.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.investorlawyers.com\/blog\/bank-america-pay-42m-new-york-fraudulent-masking-involving-electronic-trading\/","twitter_card":"summary_large_image","twitter_title":"Bank of America to Pay $42M to New York Over Fraudulent \u201cMasking\" Involving Electronic Trading | SSEK Law Firm Blog","twitter_description":"Bank of America Merrill Lynch will pay a $42M penalty to settle allegations that it engaged in fraudulent practices involving electronic trading services.","twitter_misc":{"Written by":"Shepherd Smith Edwards &amp; 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