Deferred Prosecution Agreement with Bank of Nova Scotia
In the recent past, the Bank of Nova Scotia entered into a Deferred Prosecution Agreement (DPA) with the US Department of Justice. This agreement resolved allegations that the bank was involved in a scheme to manipulate the prices of precious metals futures contracts, as well as conspiring to rig Libor benchmark interest rates. The DPA also settled allegations that the Bank of Nova Scotia failed to implement an adequate anti-money laundering program.
A Deferred Prosecution Agreement is a legal agreement between a prosecutor and a defendant in a criminal case. In this agreement, the defendant admits to committing the alleged crime, and agrees to meet certain conditions set by the prosecutor, in exchange for the prosecution being deferred or even dismissed.
Under the DPA, the Bank of Nova Scotia agreed to pay a penalty of $127.4 million to the Department of Justice, and to cooperate fully with ongoing investigations into the matter. The bank also agreed to enhance its compliance program, so as to prevent similar misconduct in the future.
The Department of Justice commended the Bank of Nova Scotia for its cooperation in the case, and for its willingness to take remedial measures to prevent future misconduct. The Department also noted that the bank self-reported the issues to regulators and authorities.
The case highlights the importance of banks having adequate compliance programs in place to detect and prevent misconduct, especially with regards to anti-money laundering and market manipulation. Banks that fail to do so can face significant penalties, not just in terms of financial penalties, but also in terms of reputational damage and loss of customer trust.
In conclusion, the Deferred Prosecution Agreement between the Bank of Nova Scotia and the US Department of Justice serves as a reminder to all financial institutions of the importance of having adequate compliance programs in place. Banks must always remain vigilant against all forms of misconduct, and must be willing to cooperate fully with regulators and authorities in the event of any wrongdoing.