RBC sued

TORONTO — Royal Bank is calling “absurd” a lawsuit filed against it by U.S. regulators that alleges it engaged in hundreds of millions of dollars in sham futures trades to reap tax benefits on its holdings of company stocks.

TORONTO — Royal Bank is calling “absurd” a lawsuit filed against it by U.S. regulators that alleges it engaged in hundreds of millions of dollars in sham futures trades to reap tax benefits on its holdings of company stocks.

The Commodity Futures Trading Commission lawsuit against Royal (TSX:RY), says the bank also concealed the true nature of the trades and made false statements to a futures trading exchange.

Royal says in a statement it consulted stock exchanges and the commission itself for guidance when the trades were made and got no objection from either.

The bank says it’s “absurd” that the CFTC is now alleging the trading activity was either fictitious or wash sales.

The agency said it is the largest case it has brought against so-called wash trades, which cancel each other out.

The CFTC alleged Royal Bank made the trades in stock futures contracts from 2007-10 with two foreign subsidiaries.

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