BofA Swaps Desk Investigated by CFTC, DOJ, Filing DisclosedTom Schoenberg and Silla Brush
Bank of America Corp.’s handling of futures trades has been investigated by the U.S. Department of Justice and the Commodity Futures Trading Commission, according to a regulatory filing in June.
The probe, reported earlier today by Reuters, was disclosed in a June 14 notice included in the Financial Industry Regulatory Authority BrokerCheck report on Eric Alan Beckwith, a former employee of Bank of America and its Merrill Lynch subsidiary. Bill Halldin, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment.
The U.S. Attorney’s Office for the Western District of North Carolina 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,” according to the filing, which cites the bank as the source of the information.
Authorities also are investigating whether Beckwith “provided accurate information” for a probe into the matter by CME Group Inc.’s Chicago Mercantile Exchange. The CFTC is conducting a parallel investigation, according to the filing.
Lia Bantavani, a spokeswoman for the U.S. Attorney’s Office in Charlotte, and Anita Liskey, a CME spokeswoman, both declined to comment.
Steven Adamske, a CFTC spokesman, didn’t respond to requests for comment. Beckwith, who the filing shows left Bank of America in July, didn’t immediately respond to a telephone message.
Reuters reported on Jan. 14 that bank employees may have profited by trading ahead of Fannie Mae and Freddie Mac swap orders, citing a description of the practice in a U.S. Federal Bureau of Investigation intelligence bulletin. That report, which didn’t name any banks, said that investigators had drawn on interviews and statements from a former high-level U.S. bank employee and another at a Canadian bank.
Shelley Lynch, an FBI spokeswoman in Charlotte, declined to comment today.