1832 Asset Management U.S. Inc.

Event Detail: ON AUGUST 19, 2020, THE BANK OF NOVA SCOTIA ("BNS") ENTERED INTO A DEFERRED PROSECUTION AGREEMENT ("DPA") WITH THE UNITED STATES DEPARTMENT OF JUSTICE, CRIMINAL DIVISION, FRAUD SECTION, AND THE UNITED STATES ATTORNEY'S OFFICE FOR THE DISTRICT OF NEW JERSEY, WITH RESPECT TO A TWO-COUNT CRIMINAL INFORMATION THAT WAS FILED ON THE SAME DATE IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY, CHARGING BNS WITH WIRE FRAUD, IN VIOLATION OF TITLE 18, UNITED STATES CODE, SECTION 1343, AND ATTEMPTED PRICE MANIPULATION, IN VIOLATION OF TITLE 7, UNITED STATES CODE, SECTION 13(A)(2) (THE "INFORMATION"). BNS WAIVED INDICTMENT, CONSENTED TO THE FILING OF THE INFORMATION, AND ACCEPTED AND ACKNOWLEDGED RESPONSIBILITY FOR THE ACTS OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS AS CHARGED IN THE INFORMATION AND AS SET FORTH IN THE STATEMENT OF FACTS ACCOMPANYING THE DPA. A PLEA WAS NOT ENTERED IN RESPECT OF ANY OF THE CHARGES. Status: Final Disposition: PURSUANT TO THE AGREEMENT, BNS AGREED TO PAY A TOTAL OF $60.4 MILLION, INCLUDING A $42 MILLION CRIMINAL MONETARY PENALTY (HALF OF WHICH WAS OFFSET AGAINST A CIVIL MONETARY PENALTY PAID TO THE COMMODITY FUTURES TRADING COMMISSION ("CFTC")), DISGORGEMENT OF APPROXIMATELY $11.8 MILLION, AND A VICTIM COMPENSATION PAYMENT OF APPROXIMATELY $6.6 MILLION. BNS ALSO AGREED TO CONTINUE TO COOPERATE IN ANY ONGOING INVESTIGATIONS AND PROSECUTIONS RELATING TO THE UNDERLYING MISCONDUCT, MODIFY ITS COMPLIANCE PROGRAM WHERE NECESSARY AND APPROPRIATE, AND RETAIN AN INDEPENDENT COMPLIANCE MONITOR FOR A PERIOD OF THREE YEARS. PROSECUTION WAS DEFERRED FOR THREE YEARS FROM THE DATE THE INDEPENDENT COMPLIANCE MONITORED IS RETAINED. AND IF BNS COMPLIES WITH THE TERMS OF THE DPA, THE CHARGES AGAINST BNS WILL BE DISMISSED 3.5 YEARS FROM THE DATE THE MONITOR IS RETAINED. Summary: AS DESCRIBED IN THE STATEMENT OF FACTS ATTACHED TO THE DPA, FROM APPROXIMATELY JANUARY 2008 TO JULY 2016, FOUR PRECIOUS METALS TRADERS LOCATED IN NEW YORK, LONDON, AND HONG KONG, ENGAGED IN FRAUDULENT AND MANIPULATIVE TRADING PRACTICES IN CONNECTION WITH THE PURCHASE AND SALE OF GOLD AND SILVER FUTURES CONTRACTS TRADED ON COMMODITY EXCHANGE INC. (COMEX) AND PLATINUM, AND PALLADIUM FUTURES CONTRACTS TRADED ON THE NEW YORK MERCANTILE EXCHANGE INC. (NYMEX). FURTHER, AS DISCUSSED IN THE STATEMENT OF FACTS, BNS'S COMPLIANCE FUNCTION FAILED TO DETECT OR PREVENT THE TRADERS' UNLAWFUL TRADING PRACTICES AND, BETWEEN APPROXIMATELY AUGUST 2013 AND FEBRUARY 2016, THREE COMPLIANCE OFFICERS HAD SUBSTANTIAL INFORMATION REGARDING UNLAWFUL TRADING BY ONE OF THE TRADERS BUT FAILED TO PREVENT FURTHER UNLAWFUL CONDUCT BY THAT TRADER.

Allegations: DURING THE PERIOD FROM AT LEAST JUNE 2013 THROUGH JUNE 2016, BANK OF NOVA SCOTIA, BY AND THROUGH TRADERS ON ITS PRECIOUS METALS TRADING DESK, ENGAGED IN THE DISRUPTIVE TRADING PRACTICE OF "SPOOFING" (BIDDING OR OFFERING WITH THE INTENT TO CANCEL THE BID OR OFFER BEFORE EXECUTION) IN GOLD AND SILVER FUTURES PRODUCTS TRADED ON THE CHICAGO MERCANTILE EXCHANGE Status: Final Sanction Detail: THE CFTC ORDER REQUIRED BANK OF NOVA SCOTIA TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $800,000. Summary: PURSUANT TO THE CFTC ORDER, BANK OF NOVA SCOTIA WAS ORDERED TO (I) CEASE AND DESIST FROM VIOLATING SECTION 4C(A)(5)(C) OF THE COMMODITY EXCHANGE ACT, (II) PAY A CIVIL MONETARY PENALTY AND (III) COMPLY WITH THE ENUMERATED CONDITIONS AND UNDERTAKINGS, INCLUDING AN UNDERTAKING TO CONTINUE TO IMPLEMENT SYSTEMS AND CONTROLS REASONABLY DESIGNED TO DETECT SPOOFING ACTIVITY BY ITS TRADERS.

Allegations: ON AUGUST 19, 2020, THE BANK OF NOVA SCOTIA ("BNS") SETTLED THREE RELATED ENFORCEMENT ACTIONS WITH THE CFTC FOR VIOLATIONS OF THE COMMODITY EXCHANGE ACT (THE "ACT") AND COMMISSION REGULATIONS. THE CFTC ISSUED THREE ORDERS, FILING AND SETTLING CHARGES AGAINST BNS FOR SPOOFING (THE "SPOOFING ORDER"), MAKING FALSE STATEMENTS (THE "FALSE STATEMENTS ORDER"), AND SWAP DEALER COMPLIANCE ISSUES (THE "COMPLIANCE ORDER"). SPOOFING ORDER. THE CFTC ALLEGED THAT, FROM APPROXIMATELY JANUARY 2008 TO JULY 2016, FOUR PRECIOUS METALS TRADERS LOCATED IN NEW YORK, LONDON, AND HONG KONG, ENGAGED IN FRAUDULENT AND MANIPULATIVE TRADING PRACTICES IN CONNECTION WITH THE PURCHASE AND SALE OF GOLD AND SILVER FUTURES CONTRACTS TRADED ON COMMODITY EXCHANGE INC. AND PLATINUM, AND PALLADIUM FUTURES CONTRACTS TRADED ON THE NEW YORK MERCANTILE EXCHANGE INC. FALSE STATEMENTS ORDER. THE CFTC ALLEGES THAT, DURING THE COURSE OF THE CFTC'S PRIOR INVESTIGATION INTO SPOOFING AT BNS, BNS MADE FALSE STATEMENTS OF MATERIAL FACT TO CFTC STAFF AND OMITTED MATERIAL FACTS REGARDING THE UNIVERSE OF BNS'S PRECIOUS METALS FUTURES ACCOUNTS, THE IDENTITIES OF TRADERS WHO TRADED ON THE PRECIOUS METALS DESK, AND THE TAG50S TRADERS USED TO TRADE PRECIOUS METALS. THE ORDER ALSO FINDS THAT BNS MADE MULTIPLE FALSE STATEMENTS TO COMEX REGARDING WHETHER BNS MAINTAINED A CENTRAL REPOSITORY OF THE TAG50S ITS TRADERS USED AS WELL AS FALSE STATEMENTS TO THE NATIONAL FUTURES ASSOCIATION CONCERNING ITS USE OF SOFTWARE TO SURVEIL FOR SPOOFING. COMPLIANCE ORDER. THE CFTC ORDER SETTLES CHARGES AGAINST BNS FOR FAILING TO SUPERVISE ITS SWAP DEALER ACTIVITIES DILIGENTLY, SWAP DEALER COMPLIANCE FAILURES, AND MAKING FALSE OR MISLEADING STATEMENTS TO CFTC STAFF DURING THE COURSE OF THE DIVISION OF ENFORCEMENT'S INVESTIGATION. THE CFTC ALLEGES THAT, DURING VARIOUS TIMES FROM AT LEAST DECEMBER 31, 2012 TO PRESENT, BNS: FAILED TO COMPLY WITH SWAP DEALER BUSINESS CONDUCT STANDARDS FOR PRE-TRADE MID-MARKET MARKS, WHICH HAD THE EFFECT OF CONCEALING BNS'S FULL MARKUP FROM COUNTERPARTIES; FAILED TO COMPLY WITH THE ACT AND COMMISSION REGULATIONS RELATING TO BNS'S COUNTERPARTY ONBOARDING PROCESS, RECORDKEEPING, AND CHIEF COMPLIANCE OFFICER REPORTING; AND FAILED TO RESPOND TO CERTAIN REQUESTS FOR REQUIRED RECORDS MADE BY THE CFTC'S DIVISION OF ENFORCEMENT. Status: Final Sanction Detail: THE ORDERS REQUIRED BNS TO PAY CIVIL MONEY PENALTIES FOR A TOTAL AMOUNT OF $50 MILLION, WHICH THE FIRM PAID AUGUST 21, 2020 Summary: WITHOUT ADMITTING OR DENYING THE VIOLATIONS, BNS CONSENTED TO THE ENTRY OF THE ORDERS ON AUGUST 19, 2020 BY THE CFTC, PURSUANT TO WHICH BNS: AGREED TO PAY A $50 MILLION CIVIL MONETARY PENALTY, WHICH THE FIRM PAID ON AUGUST 21, 2020, CEASE AND DESIST FROM ANY FURTHER VIOLATIONS OF THE ACT AND CFTC REGULATIONS, AS CHARGED, REMEDIATE THE COMPLIANCE FAILURES, AND RETAIN AN OUTSIDE MONITOR FOR A THREE-YEAR TERM.

Allegations: ON MAY 11, 2023, THE BANK OF NOVA SCOTIA ("BNS") SETTLED AN ENFORCEMENT ACTION WITH THE CFTC FOR VIOLATIONS OF THE COMMODITY EXCHANGE ACT (THE "ACT") AND COMMISSION REGULATIONS. THE CFTC ISSUED AN ORDER FINDING THAT BNS EMPLOYEES HAD COMMUNICATED BOTH INTERNALLY AND EXTERNALLY REGARDING BNS'S COMMODITIES AND SWAP BUSINESSES THROUGH UNAPPROVED METHODS SUCH AS TEXT MESSAGES AND WHATSAPP MESSAGES FROM AT LEAST 2020 THROUGH THE DATE OF THE ORDER. THE CFTC FOUND THAT BNS DID NOT MAINTAIN AND PRESERVE THE BUSINESS-RELATED COMMUNICATIONS TRANSMITTED THROUGH THESE UNAPPROVED METHODS, INCLUDING CERTAIN RECORDS REQUIRED TO BE MAINTAINED PURSUANT TO CFTC RECORDKEEPING REQUIREMENTS. THE CFTC FOUND THAT BNS FAILED TO DILIGENTLY SUPERVISE ITS BUSINESSES TO ENSURE COMPLIANCE WITH CFTC RECORDKEEPING REQUIREMENTS AND THE FIRM'S OWN POLICIES AND PROCEDURES REGARDING UNAUTHORIZED COMMUNICATION METHODS. Status: Final Sanction Detail: THE ORDER REQUIRED BNS TO PAY A CIVIL MONEY PENALTY FOR A TOTAL AMOUNT OF $15 MILLION, WHICH THE FIRM PAID MAY 11, 2023. Summary: WITHOUT ADMITTING OR DENYING THE VIOLATIONS, BNS CONSENTED TO THE ENTRY OF THE ORDER ON MAY 11, 2023 BY THE CFTC, PURSUANT TO WHICH BNS: AGREED TO PAY A $15 MILLION CIVIL MONETARY PENALTY, WHICH THE FIRM PAID ON MAY 11, 2023, CEASE AND DESIST FROM ANY FURTHER VIOLATIONS OF THE ACT AND CFTC REGULATIONS, AS CHARGED, AND CONDUCT A COMPREHENSIVE REVIEW OF ITS POLICIES, PROCEDURES, TRAINING, AND SURVEILLANCE PROGRAM REGARDING COMMUNICATIONS SURVEILLANCE, WITH FINDINGS TO BE REPORTED TO THE CFTC, REMEDIATE THEIR COMMUNICATIONS SURVEILLANCE PROGRAM IN ACCORDANCE WITH THE FINDINGS OF THAT REVIEW, PERFORM A ONE-YEAR EVALUATION OF ITS COMMUNICATIONS SURVEILLANCE PROGRAM, AND REPORT DISCIPLINE RELATED TO THE VIOLATION OF POLICIES AND PROCEDURES CONCERNING THE PRESERVATION OF ELECTRONIC COMMUNICATIONS FOR A TWO-YEAR PERIOD.

Allegations: THE ALLEGATIONS RELATE TO A FAILURE TO TIMELY FILE BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS UNDER SECTION 13(D) OF THE EXCHANGE ACT AND THE RULES PROMULGATED THEREUNDER. THESE RULES REQUIRE ANY PERSON WHO DIRECTLY OR INDIRECTLY ACQUIRES BENEFICIAL OWNERSHIP OF MORE THAN 5% OF A REGISTERED CLASS OF EQUITY SECURITY TO FILE A STATEMENT WITH THE SEC DISCLOSING CERTAIN INFORMATION AND TO FILE CERTAIN UPDATING AMENDMENTS. WHILE SUBJECT TO THESE REPORTING REQUIREMENTS DUE TO ITS BENEFICIAL OWNERSHIP OF MORE THAN 5% OF A REGISTERED CLASS OF EQUITY SECURITIES FOR SEVERAL ISSUERS, THE BANK OF NOVA SCOTIA VIOLATED SECTION 13(D) BY FAILING TO TIMELY FILE AS REQUIRED ON SCHEDULE 13G. Status: Final Sanction Detail: $375,000 PAID 9/25/2024 Summary: THE SEC PROVIDED A CEASE-AND-DESIST ORDER PURSUANT TO SECTION 21C OF THE SECURITIES EXCHANGE ACT OF 1934 AGAINST THE BANK OF NOVA SCOTIA AND A CIVIL MONEY PENALTY IN THE AMOUNT OF $375,000. THE BANK OF NOVA SCOTIA HAS COMMITTED TO AUTOMATING CERTAIN PROCESSES TO ENSURE COMPLIANCE WITH THE RELEVANT RULES GOING FORWARD.