NatWest unit pleads guilty to Treasury market manipulation scheme -U.S. Justice Department By Reuters

By Chris Prentice and Iain Withers

WASHINGTON (Reuters) -A unit of NatWest Group on Tuesday agreed to pay about $35 million and pleaded guilty to wire and securities fraud in relation to a long-running scheme by some of its traders to manipulate U.S. Treasury debt markets.

The lender’s investment bank NatWest Markets admitted its traders engaged in schemes to manipulate U.S. Treasury markets over a decade up to 2018. The firm agreed to serve three years of probation in addition to the fine and restitution, the U.S. Department of Justice said in a statement.

NatWest traders in Connecticut, London and Singapore engaged in schemes in which they manipulated Treasury market prices through a practice known as “spoofing,” or placing orders with the intent to cancel them before execution, according to Tuesday’s court filings.

The firm regrets the “past behaviour of a small number of former employees,” Robert Begbie, NatWest Market’s chief executive officer, said in a statement. “The behaviour of these individuals was unacceptable and has no place in the bank we are today.”

The penalty and other payments will cover both spoofing-related charges as well as a breach of a prior agreement with the Justice Department, NatWest said.

The news comes little more than a week after NatWest was fined 265 million pounds by a British court for failing to prevent the laundering of nearly 400 million pounds, some of it deposited at a branch in bin bags.