UPDATE 1-Scotiabank to pay $800,000 to settle U.S. CFTC charges

(Adds details on the case, Scotiabank comment)

WASHINGTON, Oct 1 (Reuters) - Canada’s Bank of Nova Scotia (Scotiabank) will pay $800,000 to settle charges filed by the U.S. Commodity Futures Trading Commission that it engaged in spoofing in gold and silver futures contracts, the CFTC said on Monday.

The regulator said in a statement that traders on Scotiabank’s precious metals trading desk placed orders to buy or sell futures contracts on the Chicago Mercantile Exchange with the intent to cancel the orders before execution.

The traders engaged in the spoofing from at least June 2013 through June 2016, the agency said. Spoof orders create the impression of greater buying or selling interest than otherwise would have existed, it said.

Scotiabank said in a statement it was pleased to have resolved the issue.

“The bank takes the proper handling and adherence to regulatory requirements and compliance policies regarding trading very seriously. With this in mind, the bank self-reported the trading activity and showed significant cooperation with the government’s investigation,” it said.

In addition to the $800,000 civil penalty, the bank has agreed to implement training programs and controls to detect and deter spoofing, the CFTC said.

The bank reported the misconduct to the CFTC after the company’s futures commission merchant raised concerns, the agency said.

“In recognition of its self-reporting and cooperation, the commission imposed a substantially-reduced penalty,” James McDonald, the CFTC’s director of enforcement, said in the statement.

Reporting by Eric Beech; editing by Mohammad Zargham and Rosalba O’Brien