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NatWest Pleads Guilty, Will Pay $35M Fine In Fraud Case

The investment bank arm of NatWest Group, formerly the Royal Bank of Scotland, will pay $35 million in fines as part of its plea deal.
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Investment bank NatWest Markets plead guilty to wire and securities fraud Tuesday in a remote hearing before a federal judge in Connecticut. 

The London-based banking arm of NatWest Group was charged with having its traders in London, Singapore and Connecticut engage in numerous schemes to manipulate U.S. Treasury markets between 2008 and 2018. 

It entered its response to the charges in a plea hearing Tuesday morning.

Prosecutors said the punishment the bank agreed to included around $35 million in fines and other penalties, a three-year probation term during which NatWest must cooperate with prosecutors, and the appointment of a corporate monitor to check on the bank's compliance practices, according to the Wall Street Journal

The isn't the first time NatWest has run afoul of U.S. authorities. 

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NatWest, formerly known as Royal Bank of Scotland, admitted in 2017 that traders at a subsidiary called RBS Securities defrauded counterparties when dealing in mortgage securities and other loan-backed investments.

The U.S. Department of Justice decided not to prosecute the bank as part of that plea deal. 

However, in the latest case, the bank was accused of "spoofing," which counts as a violation of that previous agreement. 

Spoofing is when a trader placer big orders for stocks, bonds or futures to manipulate the price and get others to think that the security is going up or down. 

Then, once enough attention is on the security, the trader cancels those orders and puts in opposite orders to take advantage of the pile-in.

NatWest did not respond to a request for comment.