Bank of America Securities will pay $1.96 million in disgorgement and $3.6 million to a victim compensation fund to resolve a Justice Department investigation into alleged market manipulation by former employees, the DOJ announced Thursday.

From 2014 to 2020, two BofA Securities traders on the bank’s U.S. treasuries desk separately schemed to manipulate the cash market, a DOJ investigation found. One of them also schemed to manipulate the futures market for U.S. treasuries by entering orders without the intent to execute them, also known as spoof orders, the DOJ said.

The former employees potentially entered upward of 1,000 suspected spoof orders collectively, the investigation found. One of the traders, Tyler Forbes, has since pleaded guilty to manipulating securities prices.

As part of the settlement, the DOJ will not prosecute BofA Securities, and the claims were resolved with no determination of liability. The firm will establish and administer its victim compensation fund.

The DOJ credited BofA Securities’ timely and voluntary self-disclosure of employee misconduct, as well as the company’s full cooperation, in resolving the matter. The agency also credited the bank for timely remediation of the issue, including internal reviews of all trading activities on the U.S. treasuries desk, as well as its compliance and internal controls.

BofA Securities paid the Financial Industry Regulatory Authority $24 million in 2023 to resolve the same issue.

“Spoofing undermines the transparency and integrity of the markets by distorting the true nature of supply and demand,” Bill St. Louis, executive vice president and head of enforcement at FINRA, said in 2023. “Spoofing is especially detrimental in the U.S. Treasury securities market, given its status as a benchmark for countless financial instruments and transactions.” 

A BofA spokesperson declined to comment on the matter.