UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

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In the Matter of: 

The Bank of Nova Scotia, 

CFTC Docket No. 20-27

Respondent. 

ORDER INSTITUTING PROCEEDINGS PURSUANT TO SECTION 6(c) AND (d) OF THE 

COMMODITY EXCHANGE ACT, MAKING FINDINGS, AND IMPOSING REMEDIAL 

SANCTIONS 

I. INTRODUCTION 

The Commodity Futures Trading Commission (“Commission”) has reason to believe that 

between approximately January 2008 and July 2016 (“Relevant Period”), The Bank of Nova 

Scotia (“BNS”) violated Section 9(a)(2) of the Commodity Exchange Act (“Act”), 7 U.S.C. 

§ 13(a)(2) (2018); for conduct occurring on or after July 16, 2011, Section 4c(a)(5)(C) of the Act, 

7 U.S.C. § 6c(a)(5)(C) (2018); and for conduct occurring on or after August 15, 2011, Section 

6(c)(1) of the Act, 7 U.S.C. § 9(1) (2018), and Commission Regulation (“Regulation”) 180.1(a)(1) 

and (3), 17 C.F.R. § 180.1(a)(1), (3) (2019). Therefore, the Commission deems it appropriate and 

in the public interest that public administrative proceedings be, and hereby are, instituted to 

determine whether BNS engaged in the violations set forth herein and to determine whether any 

order should be issued imposing remedial sanctions. 

In anticipation of the institution of an administrative proceeding, BNS has submitted an 

Offer of Settlement (“Offer”), which the Commission has determined to accept. Without 

admitting or denying any of the findings or conclusions herein, except to the extent that BNS 

admits those findings in any related action against BNS by, or any agreement with, the United 

States Department of Justice (“DOJ”) or any other governmental agency or office, BNS consents 

to the entry of this Order Instituting Proceedings Pursuant to Section 6(c) and (d) of the 

Commodity Exchange Act, Making Findings, and Imposing Remedial Sanctions (“Order”), and 

acknowledges service of this Order.1 

1 BNS consents to the use of the findings of fact and conclusions of law in this Order in this proceeding and in any 

other proceeding brought by the Commission or to which the Commission is a party or claimant, and agrees that they 

shall be taken as true and correct and be given preclusive effect therein, without further proof. BNS does not consent, 

however, to the use of this Order, or the findings or conclusions herein, as the sole basis for any other proceeding 

brought by the Commission or to which the Commission is a party or claimant, other than: a proceeding in bankruptcy 

or receivership; or a proceeding to enforce the terms of this Order. BNS does not consent to the use of the Offer or this 

Order, or the findings or conclusions in this Order, by any other party in any other proceeding. 
 

 

 

II. FINDINGS

The Commission finds the following: 

A. SUMMARY

On thousands of occasions throughout the Relevant Period, BNS, by and through Corey

Flaum,2 a BNS precious metals trader based in New York, and three other BNS precious metals 

traders, each of whom acted independently (“Traders”), placed orders to buy or sell certain gold 

and silver futures contracts traded on the Commodity Exchange, Inc. (“COMEX”) with the intent 

to cancel those orders before execution (i.e., “spoofing”). In doing so, the Traders engaged in a 

manipulative and deceptive conduct, intentionally sending false signals of supply or demand 

designed to deceive market participants into executing against other orders the Traders wanted 

executed. The Traders engaged in this conduct with the intent to manipulate market prices. 

By and through the Traders’ acts, BNS violated Section 9(a)(2) of the Act, 7 U.S.C. 

§ 13(a)(2) (2018); for conduct occurring on or after July 16, 2011, Section 4c(a)(5)(C) of the Act,

7 U.S.C. § 6c(a)(5)(C) (2018); and for conduct occurring on or after August 15, 2011, Section

6(c)(1) of the Act, 7 U.S.C. § 9(1)(2018), and Regulation 180.1(a)(1) and (3), 17 C.F.R.

§ 180.1(a)(1), (3) (2019).

The Commission previously entered an order on September 28, 2018, sanctioning BNS for 

spoofing in the precious metals futures market. BNS had disclosed to the CFTC that one of its 

traders (Flaum), who BNS terminated, had engaged in spoofing, and the Commission accepted an 

Offer of Settlement from BNS to resolve its investigation at an early stage. See In re The Bank of 

Nova Scotia, CFTC No. 18-50, 2018 WL 4828376, at *1, *4 (Sept. 28, 2018) (“BNS I”) (imposing 

an $800,000 civil monetary penalty for spoofing engaged in by traders on its precious metals desk 

in New York from June 2013 through June 2016, in violation of Section 4c(a)(5)(C) of the Act). 

The Commission predicated its findings as to the nature and scope of the spoofing at BNS 

and the sanctions in BNS I on BNS’s representations identifying its traders’ order entry operator 

identifiers (“Tag50s”). The Commission also expressly recognized BNS’s cooperation and 

credited its cooperation in the form of a substantially reduced civil monetary penalty. BNS I, at 

*1-2. BNS’s representations, however, were false and omitted multiple Tag50s its precious metals

traders, including Flaum, used. BNS’s false statements and omissions resulted in part from BNS’s

incomplete and inconsistent recordkeeping.

BNS failed to identify these errors to the Commission’s Division of Enforcement and 

notify the Commission of its misrepresentations and omissions before it submitted its offer of 

settlement in BNS I. BNS’s multiple misrepresentations and omissions in BNS I concealed the 

2

 The Commission has already taken action against Flaum, who cooperated in this matter.See In re Flaum, CFTC No.

19-15, 2019 WL 3425039, at *1-4 (July 25, 2019) (finding that Flaum engaged in spoofing to deceive market

participants into executing against orders he wanted filled and with the intent to manipulate market prices in violation

of Sections 9(a)(2), 4c(a)(5)(C), and 6(c)(1) of the Act and Regulation 180.1(a)(1) and (3). In addition to settling with

the Commission, Flaum pleaded guilty to attempted price manipulation and is awaiting sentencing. See Minute

Entry,United States v. Flaum, No. 19 CR 338 (BMC) (E.D.N.Y. July 25, 2019), ECF No. 4.

2 
 

 

true scope and nature of its wrongdoing, which accordingly was not reflected in BNS I. Although 

BNS did not identify these omissions prior to the resolution of BNS I, BNS has worked to identify 

the missing information for the Commission in the period since these omissions were identified. 

B. RESPONDENT

The Bank of Nova Scotia is a chartered schedule I bank on the Bank Act (Canada),

headquartered in Toronto, Canada. BNS has been provisionally registered with the Commission 

as a Swap Dealer since December 31, 2012. The spoofing activity described in this Order 

emanated from three separate BNS offices. 

C. FACTS

1. Spoofing and Attempted Manipulation

During the Relevant Period, in connection with its precious metals business, BNS 

employed the Traders at trading desks in New York, London and Hong Kong. As part of their 

responsibilities, the Traders, on behalf of BNS, placed bids and offers for certain gold and silver3 

futures contracts traded on COMEX, a futures exchange and Designated Contract Market 

(“DCM”) that is owned and operated by CME. 

On thousands of occasions during the Relevant Period, the Traders—principally 

Flaum—manually placed bids and offers for certain gold and silver futures contracts with the 

intent to cancel those orders before execution. Generally, the Traders’ unlawful trading involved 

three steps. First, the trader placed a relatively small bid or offer with the intent to execute that 

order (the “Genuine Order”). Second, prior to the execution of the Genuine Order, that trader 

placed a larger order (or multiple small orders) on the opposite side of the market with the intent to 

cancel the order(s) before execution (the “Spoof Order”). The Traders placed the Spoof Orders to 

create a false impression of buying or selling interest, with the intent to manipulate prices to reflect 

their desired price and not the legitimate forces of supply and demand. Third, within seconds of 

the Genuine Order being filled, the trader cancelled the Spoof Order before it was filled. The 

Traders’ unlawful trading, which they executed at times between approximately January 2008 and 

July 2016, and involved thousands of Spoof Orders, was at times successful. The Traders 

executed trades at the prices they desired, benefitting BNS and inflicting harm on the markets and 

other market participants, causing approximately $6.6 million in market losses. 

BNS’s compliance function, especially as it related to trade surveillance, failed to detect 

and deter the Traders’ unlawful trading practices. On at least two occasions between 

approximately August 2013 and February 2016, senior members of BNS’s compliance group had 

substantial information regarding unlawful trading by Trader A, who was based in Hong Kong at 

that time, but failed to stop that activity. BNS’s compliance staff thus contributed to the illegal 

conduct and undermined the control functions necessary to an effective compliance program. 

3

 On a limited number of occasions, Flaum and Trader A engaged in the same conduct with respect to platinum and

palladium futures contracts. 

3 
 

 

 

 

First, in August 2013, a senior BNS compliance official, Compliance Officer A, circulated 

to BNS traders a compliance information deck setting forth the requirements under the 

Commission’s then-recently issued final guidance regarding prohibitions on disruptive trading 

practices under Section 747 of the Dodd-Frank Wall Street Reform and Consumer Protection Act 

of 2010, Pub. L. 111-203, 124 Stat. 1376. Trader A responded, seeking clarification and providing 

substantial information regarding the nature of his trading, including by describing how he placed 

groups of one-contract orders on one side of the market to facilitate executions on the opposite side 

of the market. Compliance Officer A forwarded Trader A’s question to two other senior BNS 

compliance officers, Compliance Officers B and C. Notwithstanding the substantial information 

available to the compliance officers regarding Trader A’s unlawful trading activity, no compliance 

officer undertook further investigation of Trader A’s trading practices, provided further guidance 

or training, or otherwise followed up on Trader A’s inquiry. 

Two and a half years later, in February 2016, one of BNS’s futures commission merchants 

(“FCM A”) contacted Compliance Officer C, inquiring about suspicious trading engaged in by 

Trader A. FCM A had flagged six instances of Trader A’s activity for possible spoofing. In each 

instance, Trader A had placed groups of multiple one-contract orders opposite iceberg orders that 

were executed. Stating that the pattern was “[p]retty obvious,” Compliance Officer C forwarded 

the information to Compliance Officer B. Despite describing the pattern of trading as “[p]retty 

obvious,” Compliance Officer C replied to FCM A that BNS had determined Trader A’s trading 

was not problematic: “[W]hat is being seen may look like potential layering or spoofing, but based 

on the fact [that] we are talking [about] 1 lots, we believe he is just adjusting his exposure to the 

marketplace.” 

As these two instances show, BNS compliance staff had substantial information regarding, 

but failed to stop, unlawful trading by Trader A between August 2013 and February 2016. 

2. Remediation

BNS represents that since 2016, it has engaged in remedial measures, including 

terminating Flaum and Compliance Officers A, B, and C and making a voluntary disclosure to the 

CFTC concerning Flaum’s conduct.4

 BNS has also strengthened its compliance program, 

including nearly doubling its annual compliance operating budget and adding more than 200 

full-time equivalent compliance positions; hiring and promoting compliance personnel with the 

necessary experience and skills; improving the Company’s compliance technology infrastructure; 

and implementing industry-standard trade surveillance tools. Furthermore, in connection with its 

resolution with the Department of Justice, Criminal Division, Fraud Section and the United States 

Attorney’s Office for the District of New Jersey and its resolution with the CFTC concerning 

various issues relating to BNS’s swap-dealer business (the “Swap Dealer Resolution”),5

 BNS has 

4

 In addition, in April 2020, BNS announced that it is winding down its metals business, including the futures trading

desks responsible for the conduct at issue here. 

5

 The Commission is entering a separate Order today against BNS concerning BNS’s failure to supervise its swap

dealer activities diligently, in violation of Sections 4s(f)(1)(C), 4s(g)(1) and (3), 4s(h)(1), and 6(c)(2) of the Act, 7 

U.S.C. §§ 6s(f)(1)(C), 6s(g)(1), (3), 6s(h)(1), 9(2) (2018), and Regulations 23.431(a)(3), 23.201(a)(1), 23.202(a)(1), 

23.402(b), 23.602(a), 1.31(d)(3)(ii), and 3.3(e), 17 C.F.R. §§ 23.431(a)(3), 23.201(a)(1), 23.202(a)(1), 23.402(b), 

4 
 

agreed to the imposition of a single monitor who will have responsibility for the tasks outlined in 

Part VI below, in the Deferred Prosecution Agreement (“the DPA”) between BNS and DOJ dated 

August 19, 2020, and the Swap Dealer Resolution dated August 19, 2020. 

III. LEGAL DISCUSSION 

A. Spoofing in Violation of Section 4c(a)(5)(C) of the Act for Conduct Occurring on, or 

After, July 16, 2011 

For conduct occurring on, or after, July 16, 2011, Section 4c(a)(5)(C) of the Act, 7 U.S.C. § 

6c(a)(5)(C) (2018), makes it unlawful for “any person to engage in any trading, practice, or 

conduct on or subject to the rules of a registered entity that . . . is, is of the character of, or is 

commonly known to the trade as, ‘spoofing’ (bidding or offering with the intent to cancel the bid 

or offer before the execution).” See, e.g., United States v. Coscia, 866 F.3d 782, 792-93 (7th Cir. 

2017) (holding that because the Act clearly defines spoofing, it provides adequate notice of 

prohibited conduct), cert denied, 138 S. Ct. 1989 (2018). 

As described above, between July 16, 2011 and the end of the Relevant Period, BNS, by 

and through the acts of the Traders, placed bids and offers for futures contracts listed on COMEX, 

a registered DCM, with the intent to cancel those bids and offers before they were executed. By 

engaging in this conduct, BNS violated Section 4c(a)(5)(C) of the Act. See CFTC v. Oystacher, 

203 F. Supp. 3d 934, 941-42 (N.D. Ill. 2016) (denying motion for judgment on the pleadings, 

holding that allegations of placing “both bids and offers with the intent to cancel those bids or 

offers before execution” constitutes “trading behavior [that] falls within the Spoofing Statute’s 

defined prohibition”). 

B. Attempted Manipulation in Violation of Section 9(a)(2) of the Act, and for Conduct 

Occurring on, or After, August 15, 2011, Section 6(c)(1) of the Act and Regulation 

180.1(a)(1) and (3) 

Section 9(a)(2) of the Act, 7 U.S.C. § 13(a)(2) (2018), makes it unlawful for “[a]ny person 

to manipulate or attempt to manipulate the price of any commodity in interstate commerce, or for 

future delivery on or subject to the rules of any registered entity.” 

For conduct occurring on, or after, August 15, 2011, Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) 

(2018), prohibits the use or attempted use of any manipulative or deceptive device in connection 

with any swap or contract of sale of any commodity in interstate commerce, or for future delivery, 

in violation of Regulation 180.1(a), 17 C.F.R. § 180.1(a) (2019), which in part states: 

It shall be unlawful for any person, directly or indirectly, in connection with any swap, or contract 

of sale of any commodity in interstate commerce, or contract for future delivery on or subject to 

the rules of any registered entity, to . . . : (1) Use or employ, or attempt to use or employ, any 

manipulative device, scheme or artifice to defraud; [or] . . . (3) Engage, or attempt to engage, in 

any act, practice, or course of business, which operates or would operate as a fraud or deceit upon 

any person . . . . 

23.602(a), 1.31 (d)(3)(ii), 3.3(e) (2019). See In re The Bank of Nova Scotia, CFTC No. 20-26 (Aug. 19, 2020). 

5 
As described above, BNS, by and through the acts of the Traders, who each acted 

independently, engaged in manipulative and unlawful trading and attempted to manipulate the 

price of gold and silver futures contracts subject to the rules of COMEX, a registered entity, by 

entering the Spoof Orders intentionally to send market participants a false signal of greater buying 

or selling interest to deceive them into transacting against their Genuine Orders. See e.g., In re 

Tower Research Capital LLC, CFTC No. 20-06, 2019 WL 6001893, at *1-3 (Nov. 6, 2019) 

(consent order) (finding that spoofing intended to send false signals of greater buying or selling 

interest constituted a manipulative or deceptive device in violation of Section 6(c)(1) and 

Regulation 180.1); In re Merrill Lynch Commodities, Inc., CFTC No. 19-07, 2019 WL 2725774, at 

*3-4 (June 25, 2019) (consent order) (finding that spoofing constituted attempted price 

manipulation under Section 9(a)(2)); cf. SEC v. Lek Sec. Corp., 276 F. Supp. 3d 49, 58-60 

(S.D.N.Y. Aug. 25, 2017) (noting that “‘trading engineered to stimulate demand’” may inject false 

pricing signals into the market and thus constitute manipulation under the securities laws (quoting 

ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 101 (2d Cir. 2007))). BNS, through the 

Traders’ misconduct, violated Section 9(a)(2) of the Act; and, for conduct occurring on or after 

August 15, 2011, Section 6(c)(1) of the Act, and Regulation 180.1(a)(1) and (3). 

C. BNS Is Liable for the Acts of Its Agents 

Section 2(a)(1)(B) of the Act, 7 U.S.C. § 2(a)(1)(B) (2018), and Regulation 1.2, 17 C.F.R. 

§ 1.2 (2019), provide that “[t]he act, omission, or failure of any official, agent, or other person 

acting for any individual, association, partnership, corporation, or trust within the scope of his 

employment or office shall be deemed the act, omission, or failure of such individual, association, 

partnership, corporation, or trust.” Pursuant to Section 2(a)(1)(B) of the Act and Regulation 1.2, 

strict liability is imposed on principals for the actions of their agents. See, e.g., Dohmen-Ramirez 

& Wellington Advisory, Inc. v. CFTC, 837 F.2d 847, 857-58 (9th Cir. 1988) superseded by statute 

on other grounds, Dodd–Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 

111-203, § 753(a), 124 Stat. 1376, 1750-54 (2010), as recognized in Chu v. CFTC, 823 F.3d 1245, 

1249 (9th Cir. 2016); Rosenthal & Co. v. CFTC, 802 F.2d 963, 966 (7th Cir. 1986); CFTC v. 

Byrnes, 58 F. Supp. 3d 319, 324 (S.D.N.Y. 2014). 

The Traders engaged in the conduct described herein within the scope of their employment 

with BNS; therefore, pursuant to Section 2(a)(1)(B) of the Act and Regulation 1.2, BNS is liable 

for those acts, omissions, and failures in violation of the provisions of the Act and Regulation cited 

above. 

IV. FINDINGS OF VIOLATIONS 

Based on the foregoing, the Commission finds that, during the Relevant Period, BNS, by 

and through its agents, the Traders, violated Section 9(a)(2) of the Act, 7 U.S.C. § 13(a)(2) (2018); 

for conduct occurring on or after July 16, 2011, Section 4c(a)(5)(C) of the Act, 7 U.S.C. 

§ 6c(a)(5)(C) (2018); and for conduct occurring on or after August 15, 2011, Section 6(c)(1) of the 

Act, 7 U.S.C. § 9(1) (2018), and Regulation 180.1(a)(1) and (3), 17 C.F.R. § 180.1(a)(1), (3) 

(2019). 

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V. OFFER OF SETTLEMENT 

BNS has submitted the Offer in which, without admitting or denying the findings and 

conclusions herein, except to the extent that BNS admits those findings in any related action 

against BNS by, or any agreement with, DOJ or any other governmental agency or office, BNS: 

A. Acknowledges service of this Order; 

B. Admits the jurisdiction of the Commission with respect to all matters set forth in this Order 

and for any action or proceeding brought or authorized by the Commission based on 

violation of or enforcement of this Order; 

C. Waives: 

1. The filing and service of a complaint and notice of hearing; 

2. A hearing; 

3. All post-hearing procedures; 

4. Judicial review by any court; 

5. Any and all objections to the participation by any member of the Commission’s 

staff in the Commission’s consideration of the Offer; 

6. Any and all claims that it may possess under the Equal Access to Justice Act, 5 

U.S.C. § 504 (2018) and 28 U.S.C. § 2412 (2018), and/or the rules promulgated by 

the Commission in conformity therewith, Part 148 of the Regulations, 17 C.F.R. pt. 

148 (2019), relating to, or arising from, this proceeding; 

7. Any and all claims that it may possess under the Small Business Regulatory 

Enforcement Fairness Act of 1996, Pub. L. No. 104-121, tit. II, §§ 201-253, 110 

Stat. 847, 857-74 (codified as amended at 28 U.S.C. § 2412 and in scattered 

sections of 5 U.S.C. and 15 U.S.C.), relating to, or arising from, this proceeding; 

and 

8. Any claims of Double Jeopardy based on the institution of this proceeding or the 

entry in this proceeding of any order imposing a civil monetary penalty or any other 

relief, including this Order; 

D. Stipulates that the record basis on which this Order is entered shall consist solely of the 

findings contained in this Order to which BNS has consented in the Offer; 

E. Consents, solely on the basis of the Offer, to the Commission’s entry of this Order that: 

1. Makes findings by the Commission that BNS violated Section 9(a)(2) of the Act, 7 

U.S.C. § 13(a)(2) (2018); for conduct occurring on or after July 16, 2011, Section 

4c(a)(5)(C) of the Act, 7 U.S.C. § 6c(a)(5)(C) (2018); and for conduct occurring on 

7 
or after August 15, 2011, Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) (2018), and 

Regulation 180.1(a)(1) and (3), 17 C.F.R. § 180.1(a)(1), (3) (2019); 

2. Orders BNS to cease and desist from violating Sections 4c(a)(5)(C), 6(c)(1), and 

9(a)(2) of the Act, and Regulation 180.1(a)(1) and (3); 

3. Orders BNS to pay restitution in the amount of six million, six hundred twenty-two 

thousand, one hundred ninety dollars ($6,622,190) within ten business days of the 

date of the entry of this Order, plus post-judgment interest, if applicable; provided, 

however, that the restitution will be offset by the amount of any restitution payment 

made pursuant to the DPA; 

4. Orders BNS to pay a civil monetary penalty in the amount of forty-two million 

dollars ($42,000,000) within ten business days of the date of the entry of this Order, 

plus post-judgment interest, if applicable; provided, however, that up to half of the 

civil monetary penalty (i.e., $21,000,000) will be offset by the amount of any 

criminal monetary penalty paid pursuant to the DPA; and 

5. Orders BNS and its successors and assigns to comply with the conditions and 

undertakings consented to in the Offer and as set forth in Part VI of this Order, 

including, but not limited to, BNS’s undertaking to pay disgorgement in the amount 

of eleven million, eight hundred twenty-eight thousand, nine hundred twelve 

dollars ($11,828,912) within ten business days of the date of the entry of this Order, 

plus post-judgment interest, if applicable; provided, however, that the 

disgorgement will be offset by the amount of any criminal disgorgement payment 

made pursuant to the DPA; and 

F. Represents that BNS is in the process of winding down its precious metals business and 

that it proactively engaged in remedial measures relating to its trading of spot, options, and 

futures contracts in its commodities business, including enhancing its compliance program 

and internal controls through, among other things: 

1. Nearly doubling its annual compliance operating budget and adding more than 200 

full-time equivalent compliance positions; 

2. Hiring and promoting compliance personnel with the necessary experience and 

skills; 

3. Improving BNS’s compliance technology infrastructure; and 

4. Implementing industry-standard trade surveillance tools. 

Upon consideration, the Commission has determined to accept the Offer. 

8 
 

 

 

VI. ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

A. BNS and its successors and assigns shall cease and desist from violating Sections 

4c(a)(5)(C), 6(c)(1), and 9(a)(2) of the Act, 7 U.S.C. § 6c(a)(5)(C), 9(1), 13(a)(2) (2018), 

and Regulation 180.1(a)(1) and (3), 17 C.F.R. § 180.1(a)(1), (3) (2019). 

B. BNS shall pay restitution in the amount of six million, six hundred twenty-two thousand, 

one hundred ninety dollars ($6,622,190) (“Restitution Obligation”) within ten business 

days of the date of the entry of this Order. If the Restitution Obligation is not paid in full or 

otherwise satisfied within ten business days of the date of the entry of this Order, then 

post-judgment interest shall accrue on the Restitution Obligation beginning on the date 

following the entry of this Order and shall be determined by using the Treasury Bill rate 

prevailing on the date of entry of this Order pursuant to 28 U.S.C. § 1961 (2018). 

The Restitution Obligation will be offset by the amount of any restitution payment made 

pursuant to the DPA. BNS shall provide proof of any payment under the DPA, including 

the case name(s) and number(s) in connection with which such payment has been made, 

and the amount by which the Restitution Obligation is to be reduced, within ten days of 

making such payment to: 

Paul G. Hayeck 

Deputy Director, Division of Enforcement 

Commodity Futures Trading Commission 

1155 21st Street, NW 

 Washington, DC 20851 

The Commission appoints the NFA to receive payments of restitution and any 

post-judgment interest from BNS and handle the distribution of payments to any persons 

designated to receive restitution. As provided in the DPA, DOJ will serve as the claims 

administrator with respect to the restitution payment received pursuant to the DPA and 

shall have sole discretion to determine how the restitution payment will be disbursed. The 

NFA shall receive such payment into an account designated the “BNS Victim 

Compensation Settlement Fund.” Because the NFA is not being specially compensated for 

these services, and these services are outside the normal duties of the NFA, it shall not be 

liable for any action or inaction arising from its appointment in this matter other than 

actions involving fraud. 

C. BNS shall pay a civil monetary penalty in the amount of forty-two million dollars 

($42,000,000) (“CMP Obligation”) within ten business days of the date of the entry of this 

Order. If the CMP Obligation is not paid in full or otherwise satisfied within ten business 

days of the date of the entry of this Order, then post-judgment interest shall accrue on the 

CMP Obligation beginning on the date following entry of this Order and shall be 

determined by using the Treasury Bill rate prevailing on the date of the entry of this Order 

pursuant to 28 U.S.C. § 1961. 

9 
The CMP Obligation will be offset by the amount of any criminal monetary penalty paid 

pursuant to the DPA. BNS shall provide (to the persons and addresses listed below) proof 

of any payment under the DPA, including the case name(s) and number(s) in connection 

with which such payment has been made, and the amount by which the CMP Obligation is 

to be reduced, within ten days of making such payment. 

BNS shall pay the CMP Obligation that has not been offset and any post-judgment interest 

by electronic funds transfer, U.S. postal money order, certified check, bank cashier’s 

check, or bank money order. If payment is to be made other than by electronic funds 

transfer, the payment shall be made payable to the Commodity Futures Trading 

Commission and sent to the address below: 

MMAC/ESC/AMK326 

Commodity Futures Trading Commission 

Division of Enforcement 

6500 S. MacArthur Blvd. 

HQ Room 181 

Oklahoma City, OK 73169 

(405) 954-6569 office 

(405) 954-1620 facsimile 

9-AMC-AR-CFTC@faa.gov 

If payment is to be made by electronic transfer, BNS shall contact Marie Thorn or her 

successor at the above address to receive payment instructions and shall fully comply with 

those instructions. BNS shall accompany payment of the CMP Obligation with a cover 

letter that identifies BNS and the name and docket number of this proceeding. BNS shall 

simultaneously transmit copies of the cover letter and the form of payment to the Chief 

Financial Officer, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 

21st Street, NW, Washington, DC 20581. 

D. BNS and its successors and assigns shall comply with the following conditions and 

undertakings set forth in the Offer: 

1. Monitor: BNS agrees to retain an independent compliance monitor pursuant to the 

terms described in the DPA and its Attachment D and the Swap Dealer Resolution, 

Part VI.2. 

2. Public Statements: BNS agrees that neither it nor any of its successors, assigns, 

agents, or employees under its authority or control shall take any action or make 

any public statement denying, directly or indirectly, any findings or conclusions in 

this Order or creating, or tending to create, the impression that this Order is without 

a factual basis; provided, however, that nothing in this provision shall affect BNS’s 

and/or its agents’ and/or employees’: (i) testimonial obligations; or (ii) right to take 

positions in other proceedings to which the Commission is not a party. BNS and its 

successors and assigns shall comply with this Order, and shall undertake all steps 

necessary to ensure that all of its agents and/or employees under its authority or 

control understand and comply with this agreement. 

10 
3. Disgorgement: BNS agrees to pay disgorgement in the amount of eleven million, 

eight hundred twenty-eight thousand, nine hundred twelve dollars ($11,828,912) 

within ten business days of the date of the entry of this Order (“Disgorgement 

Obligation”). If the Disgorgement Obligation is not paid in full or otherwise 

satisfied within ten business days of the date of the entry of this Order, then 

post-judgment interest shall accrue on the Disgorgement Obligation beginning on 

the date following entry of this Order and shall be determined by using the Treasury 

Bill rate prevailing on the date of the entry of this Order pursuant to 28 U.S.C. § 

1961. 

The Disgorgement Obligation will be offset by the amount of any criminal 

disgorgement payment made pursuant to the DPA. BNS shall provide (to the 

persons and addresses listed below) proof of any payment under the DPA, 

including the case name(s) and number(s) in connection with which such payment 

has been made, and the amount by which the Disgorgement Obligation is to be 

reduced, within ten days of making such payment. 

BNS shall pay any portion of the Disgorgement Obligation that has not been offset 

and any post-judgment interest by electronic funds transfer, U.S. postal money 

order, certified check, bank cashier’s check, or bank money order. If payment is to 

be made other than by electronic funds transfer, the payment should be made 

payable to the Commodity Futures Trading Commission and sent to the address 

below: 

MMAC/ESC/AMK326 

Commodity Futures Trading Commission 

Division of Enforcement 

6500 S. MacArthur Blvd. 

HQ Room 181 

Oklahoma City, OK 73169 

(405) 954-6569 office 

(405) 954-1620 facsimile 

9-AMC-AR-CFTC@faa.gov 

If payment is to be made by electronic transfer, BNS shall contact Marie Thorn or 

her successor at the above address to receive payment instructions and shall fully 

comply with those instructions. BNS shall accompany payment of the 

Disgorgement Obligation with a cover letter that identifies BNS and the name and 

docket number of this proceeding. BNS shall simultaneously transmit copies of the 

cover letter and the form of payment to the Chief Financial Officer, Commodity 

Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, 

Washington, DC 20581. 

4. Cooperation with the Commission: BNS shall cooperate fully and expeditiously 

with the Commission, including the Division, in this action and in any current or 

future Commission investigation or action related thereto. BNS shall also 

cooperate with the Commission in any investigation, civil litigation, or 

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administrative proceeding related to, or arising from, the subject matter of this 

proceeding. BNS’s cooperation shall continue for a period of five years from the 

date of entry of this Order. As part of such cooperation, BNS agrees to: 

a. Preserve and produce to the Commission in a responsive and prompt 

manner, as requested by Division staff, all non-privileged documents, 

information, and other materials wherever located, including but not limited 

to audio files, electronic communications, and trading records and data, in 

the possession, custody, or control of BNS; 

b. Comply fully, promptly, completely, and truthfully, subject to any legally 

recognized privilege or applicable law and regulations, with any inquiries 

or requests for information and documents by the Commission; 

c. Identify and authenticate relevant documents and other evidentiary 

materials, execute affidavits or declarations, and provide a corporate 

representative to testify completely and truthfully at depositions, trial, and 

other judicial proceedings, when requested to do so by Division staff; 

d. Use its best efforts to produce any current (as of the time of the request) 

officer, director, employee, or agent of BNS, regardless of the individual’s 

location and at such a location that minimizes Commission travel 

expenditures, to provide assistance at any trial, proceeding, or Commission 

investigation related to the subject matter of this proceeding, including, but 

not limited to, requests for testimony, depositions, and/or interviews, and to 

encourage them to testify completely and truthfully in any such trial, 

proceeding, or investigation, subject to applicable law and regulations; and 

e. Subject to applicable laws and regulations, use its best efforts to assist in 

locating and contacting any prior (as of the time of the request) officer, 

director, employee, or agent of BNS. 

5. Partial Satisfaction: BNS understands and agrees that any acceptance by the 

Commission of partial satisfaction of BNS’s Restitution Obligation, CMP 

Obligation, or Disgorgement Obligation shall not be deemed a waiver of its 

obligation to make further payments pursuant to this Order or a waiver of the 

Commission’s right to seek to compel payment of any remaining balance. 

6. Change of Address: Until such time as BNS satisfies in full its Restitution 

Obligation, CMP Obligation, and Disgorgement Obligation as set forth in this 

Order, BNS shall provide written notice to the Commission by certified mail of any 

change to its telephone number and mailing address within ten days of the change. 

7. Remediation: As set forth above, BNS represents that it has already undertaken 

and continues to undertake remedial measures to enhance its compliance program 

and internal controls. BNS shall maintain and update its compliance program as 

appropriate so that it is designed and implemented to effectively detect and deter 

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violations of the Act and shall comply with the obligations relating to its corporate 

compliance program and reporting requirements as set forth in the DP A. 

The provisions of this Order shall be effective as of this date. 

Christopher J. Kirkpatrick 

Secretary of the Commission 

Commodity Futures Trading Commission 

Dated: August 19, 2020 

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