The Commodity Futures Trading Commission has penalized Bank of America CorporationBAC for manipulating benchmark interest rates. For its wrongdoing, BofA has been ordered to pay $30 million.
According to the CFTC, BofA attempted to manipulate the U.S. Dollar International Swaps and Derivatives Association Fix, a leading global benchmark, during the period between January 2007 and December 2012.
The regulator informed that traders at the bank also made false reports during that time and gave wrong information to brokers in order to misguide. These traders tried to influence reference rates and spreads just before the final rate was published. With this, the bank would benefit from certain trading positions in connection with interest-rate swap options.
Bill Halldin, a BofA spokesman stated in defense, "We have significantly enhanced our procedures to detect any inappropriate behaviour."
However, this is not the only case, in which a bank has been held liable for such manipulative practices.
According to James McDonald, CFTC director of enforcement, the BofA case is the ninth one, in which benchmark rate manipulation has been detected.
McDonald informed, "The commission will continue to work vigilantly to ensure the integrity of critical financial benchmarks and hold all wrongdoers accountable, no matter how widespread the misconduct."
Apart from BofA, some other banks, which have been charged for similar malpractices in the past few years, are Barclays PLC BCS , Citigroup C , The Goldman Sachs Group Inc. GS and JPMorgan Chase & Co.
Though BofA has resolved quite a many litigation issues, it still faces investigations from several federal agencies and a few foreign governments for its business conducts in the pre-crisis period. Legal expenses are expected to continue weighing, marginally, on the company's bottom line in the near future.
Shares of the company have gained 23.2% in the past year, outperforming the industry 's growth of 10.7%.
BofA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.