Bank of America Merrill Lynch fined $ 42 million for ‘ masking ’ electronic order routing
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The global head of cash trading at Citi has reportedly left the firm just two years after he returned to the investment bank . Armando Diaz joined Citigroup in March 2016 from Millennium Management where he was global head of execution services , overseeing the fund manager ’ s execution team and strategies .
Barclays has appointed a new global head of electronic equities who will join the bank after spending nearly 20 years at Credit Suisse in various senior electronic trading roles . Naseer Al-Khudairi built his extensive career experience at Credit Suisse leading several businesses at the investment bank , including roles as head of European cash equities and head of cross asset electronic trading
Royal London Asset Management has appointed Cathy Gibson as its head of dealing , responsible for heading up a newly-created centralised trading desk at the firm that will cover all asset classes . The new desk will be populated with four traders who already work within its equity and fixed income teams , working under the leadership of Gibson , joined on 19 February .
AXA Investment Management ’ s head of trading and industry heavyweight Paul Squires is to leave after 21 years with the firm . Squires first joined the AXA IM in 1996 as an equity trader in the UK before moving to trade European equities in 1999 and then to fixed income in 2003 . In 2005 , he was promoted to head of trading after AXA ’ s trading group merged with the securities financing team .
Bank of America Merrill Lynch fined $ 42 million for ‘ masking ’ electronic order routing
BAML made agreements with HFT firms including Citadel Securities and Two Sigma to secretly route client orders .
Bank of America Merrill Lynch ( BAML ) has been fined $ 42 million after it admitted to New York authorities that it sent orders electronically to certain liquidity providers secretly as part of a ‘ masking ’ scheme .
The investment bank confessed it systematically hid where dark pool orders were being sent as part of undisclosed agreements with high-frequency trading firms including Citadel Securities , Knight Capital , Two Sigma Securities and Madoff Securities .
Over a five-year period , BAML reprogrammed its electronic trading systems , doctored trade confirmations sent to clients and altered post-trade reports to avoid detection , claiming orders sent to those liquidity providers were instead being executed in-house .
Authorities in New York found BAML applied its ‘ masking scheme ’ to more than 16 million client orders between 2008 and 2013 , representing over four billion traded shares .
“ Bank of America Merrill Lynch went to astonishing lengths to defraud its own institutional clients about who was seeing and filling their orders , who was trading in its dark pool , and the capabilities of its electronic trading services ,” New York Attorney General Eric Schneiderman said .
“ As Wall Street firms offer increasingly complex electronic trading services , they cannot use new technology to exploit their clients in service of their business relationships with large industry players , like Bank of America Merrill Lynch did here .”
The settlement is the latest in a string of regulatory actions against major financial institutions related to electronic , dark pool and high frequency trading . Barclays , Deutsche Bank and Credit Suisse incurred major fines in 2016 for allegations of misleading investors about dark pool operations and fraudulent electronic trading operations .
Attorney General Schneiderman urged the financial community to evaluate and , if necessary , reform practices around electronic trading services .
12 // TheTrade // Spring 2018