BofA commodity arm fined by DOJ for trading practices

FILE PHOTO: A Bank Of America logo is pictured in the Manhattan borough of New York August 21, 2014. REUTERS/Carlo Allegri

(Reuters) – Bank of America Corp’s commodity arm Merrill Lynch Commodities Inc has agreed to pay $25 million to resolve a probe into its trading practices, the U.S. Department of Justice said on Tuesday.

Between 2008 and 2014, traders employed by Merrill Lynch Commodities deceived other traders by injecting misleading information into the precious metals futures market, the DOJ said in a statement.

During the period, the traders placed thousands of orders for precious metals futures contracts only to cancel just before execution, thereby creating a false impression of increased supply or demand, according to the DOJ.

In a separate settlement with the Commodity Futures Trading Commission on Tuesday, Merrill Lynch Commodities also agreed to pay $11.5 million in fines.

Reporting by Bharath Manjesh in Bengaluru; Editing by Shounak Dasgupta

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