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NatWest pleads guilty to US Treasury fraud charges, agrees to pay $35M

NatWest pleads guilty to US Treasury fraud charges, agrees to pay $35M
NatWest pleads guilty to US Treasury fraud charges, agrees to pay $35M

A division of NatWest Group, a majority state-owned British investment, and banking firm, has reportedly agreed to pay nearly $35 million and enter a guilty plea to wire and securities fraud. The charges come in connection with a long-running plan by some of its traders to mislead U.S. Treasury debt markets.

For more than a decade, the lender's investment company, NatWest Markets, conceded that its traders participated in attempts to mislead US Treasury markets.

According to the US Department of Justice (DOJ), in addition to the fine and reparations, the company will serve three years of probation.

The penalty is yet another blow for the British state-owned bank's initiatives to strengthen its reputation under Chief Executive Alison Rose, which entailed a complete rebranding of the business from the scandal-plagued name of Royal Bank of Scotland last year.

Following its bailout during the financial crisis of 2008, the institution is still majority-owned by British taxpayers.

The plea deal came over a week after the British court fined NatWest a tremendous £265 million (US$352 million) for failing to stop the laundering of approximately £400 million, which were sometimes deposited at its branch in garbage bin bags.

Nonetheless, some have argued that the penalty imposed earlier this week was excessively lenient.

Dennis Kelleher, director of the Better Markets research organization on financial regulation, stated that it is commendable that the DOJ compelled the bank to enter a plea, pay the fine and compensation, and serve three years of probation. 

According to prosecution documents filed Tuesday, NatWest traders in Connecticut, London, and Singapore indulged in spoofing methods in which they misled Treasury market prices.

In a statement, Robert Begbie, NatWest Markets' chief executive officer, expressed regrets for the previous behavior of a few former colleagues.

These employees' behavior was abhorrent and therefore has no place in what the bank is today, Begbie stated.

According to NatWest, the $25.2 million criminal penalties along with other payments will address both spoofing-related penalties and a violation of a prior deal with the Justice Department.

Source credit: https://money.usnews.com/investing/news/articles/2021-12-21/natwest-unit-pleads-guilty-to-treasury-market-manipulation-scheme-u-s-justice-department

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Vinisha Joshi

Vinisha Joshi

Despite graduating with an engineering degree in electronics and communication, Vinisha Joshi chose the road less travelled, and decided to pursue her career in content writing . Currently, she pens down articles for cuereport.com and a few other distinguished news platforms, pertaining to business and finance.