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RBC denies illegal share trade scheme

RBC denies illegal share trade scheme
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A US financial regulator has accused Royal Bank of Canada of making hundreds of millions of dollars worth of illegal trades of share futures to get Canadian tax credits.

A civil lawsuit said a small group of senior RBC employees had created a “trading scheme of massive proportion.”

The Canadian bank called the allegations “absurd” and “meritless” and said it will mount a rigorous defence against the “baseless allegations.”

Elisa Barsotti, a spokeswoman for RBC, said in a statement that the bank had taken no action against any RBC employees with regard to the trades, as it disagrees with the charges made against it.

In the lawsuit, filed on Monday in the Southern District of New York, the Commodity Futures Trading Commission said the scheme lasted from at least June 2007 to May 2010.

It also accused RBC of concealing and making false statements about the scheme.

The lawsuit claims that RBC and its affiliates bought and sold stocks in US and Canadian companies, and took opposing bets on futures written on those same stocks.

The CFTC asserted that the goal of the trades was to earn an undisclosed amount in Canadian tax credits, while limiting market exposure.