In a shocking development - shocking because as everyone obviously knows market are never rigged or manipulated - late on Friday Reuters reported that the CFTC was set to announce it has fined European lenders UBS, HSBC and Deutsche Bank millions of dollars each for "spoofing" and manipulation in the U.S. futures market.
The enforcement action by the U.S. derivatives regulator was said to be the result of a multi-agency investigation that also involved the Department of Justice and the FBI - the first of its kind for the CFTC.
Reuters also reported that the fines for UBS and Deutsche Bank would be north of ten million, while the fine for HSBC will be slightly less than that. Spoofing, as a reminder, involves placing bids to buy or offers to sell futures contracts with the intent to cancel them before execution. By creating an illusion of demand, spoofers can influence prices to benefit their market positions. Spoofing is what Navinder Sarao was criminally accused of doing when he singlehandedly launched the May 2010 flash crash, for which he is now imprisoned.
And yes, spoofing is a criminal offense under a provision implemented as part of the 2010 Dodd-Frank financial reform.
* * *
Following the Reuters report, many asked why Sarao was arrested and jailed, while major banks caught spoofing and manipulating futures will get away with paying a fine that is a tiny fraction of how much they made from rigging markets in the first place.
Well, it appears that someone else is going to jail after all, because as Reuters followed up this morning, US authorities were set to arrest several people on Monday as part of the spoofing and manipulation probe. The individuals who are set to be perp walked, were previously employed as traders by UBS, Deutsche Bank and HSBC, and will be charged as part of the multi-agency probe,
Last August, a U.S. appeals court upheld the conviction of former New Jersey-based high-speed trader Michael Coscia who was the first individual to be criminally prosecuted for spoofing in the US, aside from Sarao of course.
This is the first time the CFTC, DOJ and FBI have worked together to bring both criminal and civil charges against multiple companies and individuals, sources said.
As Reuters adds, "the bank investigations have been going on for more than a year, but the CFTC has pursued the charges against the traders as part of a more recent effort led by the agency's head of enforcement, James McDonald, to hold individual employees accountable for corporate wrongdoing, two of the sources said."
McDonald, a former prosecutor in the Southern District of New York who was appointed to the CFTC role in March, has said he aims to achieve that by encouraging companies and staff to report their own wrongdoing and cooperate with investigators in return for more lenient penalties.
Once the names of market riggers are revealed we will promptly follow up, although we are sad to advise readers that the biggest manipulator of all will sadly be spared.
Comments
Fake news, Jews would never have allowed such market manipulations.
Of course, not a single US bank/trading firm is charged with this.
I think I know why – ‘cause we (the banks/SEC/CFTC/FBI) are so honest! ;-)
Looney
In reply to Fake news, Jews would never… by BigWillyStyle887
Exactly my first thought.
US banks are as straight as a die. So no need to even look.
In reply to … by Looney
This perpwalk could be exactly what a previous article about the US pressuring the EU on anti-Iranian sanctions.
What, too looney? ;-)
Looney
In reply to Exactly my first thought… by JohninMK
Oh boy, they're gonna get a severe wrist slapping.
In reply to … by Looney
arrest..i used to hate the word. now i like it a bit
In reply to Oh boy, they're gonna get a… by Richard Chesler
I'm sure the spoofing will stop now LMFAO! There will be just as much spoofing going on today as there always has been, maybe more.
These guys probably had found a way to fuck with Goldman's HFT bots so they got arrested. The spoofing narrative is likely just a cover story.
In reply to arrest..i used to hate the… by wildbad
Notice they are all non-US banks, LOL. Spoofing only allowed by GS, MS, Citi, BofA, JPM, etc. This simply a cash grab for cash-strapped US to fine foreign banks.
In reply to I'm sure the spoofing will… by eclectic syncretist
Ahhhh ... Paper GOLD Paper SILVER ???????????
In reply to Notice they are all non-US… by YUNOSELL
If the high frequency algos didn't specialize in front-running every legitimate order... there would be no spoofing. On the floor of the exchanges, with real humans, both of these practices were forbidden; now, due to the magic of the internet, these two practices are all that is left of the market.
Now all we have are a few legitimate orders and A TON of robots sniffing those orders out and front-running them, and robots sniffing out the robots who are sniffing out orders, etc.
I wish the DOJ would stop going after the humans waging war against Skynet and would instead go after the illegal trade practices of the algos, HFT firms, and corrupt exchanges that enable this behavior for their own enrichment.
There is no need for millions of automated front-running robots to be able to see 10 layers of volume deep into the bid offer stack on every asset. If you are able to see into the bid offer stack, you should have a duty to not front-run it in any way.
In reply to Notice they are all non-US… by YUNOSELL
As it concerns the CFTC, " it's hard to make someone understand something that they are paid to not understand"
In reply to If the high frequency algos… by P4K
Our good ol american banks deserve the kind of trust we give the Fed.
In reply to Exactly my first thought… by JohninMK
Right, the "usual suspects" (BIG 4 US & BIG EUROS EXCLUDED)
In reply to Exactly my first thought… by JohninMK
It's about freakin time!!!
Like......where ya been?
In reply to … by Looney
Bring out your dead.....scapegoats.
In reply to … by Looney
" although we are sad to advise readers that the biggest manipulator of all will sadly be spared. "
beat me to it...........
In reply to Bring out your dead… by Cognitive Dissonance
I hate these these kinds of crimes against humanity have been labeled "white collar". They should be "rope collar"!
In reply to … by Looney
the dollar is about to go way up, while gold goes way, way down.
In reply to Fake news, Jews would never… by BigWillyStyle887
What's the matter with you? You're not supposed to say "jews." Just say "kikes."
In reply to Fake news, Jews would never… by BigWillyStyle887
Apparently there are 7 kike downvoters here.
Thats up from 2.
In reply to What's the matter with you? … by gespiri
Spoofing is not buying or selling contracts and cancelling before execution in futures.If I buy options calls and puts my contracts are executed the second I buy these. Take the last group of traders that were convicted. Two groups of traders working together were buying contracts above and below the current price. One group would move price in the direction of the others group's strike price and then close out the trades. This other group would do the same until price was again at the strike price and then closing out trades. Both groups knew where prices were going in the short term moving price in one direction and then another. These are extremely difficult to detect for regulators because it looks just like your every day market noise and is extremely short term in duration. As always when they are finished price always fall back to the mean..
In reply to Fake news, Jews would never… by BigWillyStyle887
10 million dollar fine...ouch...5 minutes of spoofing profits down the drain. That's gotta hurt!
Rival criminal enterprises. One operating on the enforcers turf.
You will pay your dues, some soldiers will go down, but then carry on.
In reply to 10 million dollar fine… by onthedeschutes
The end is nigh, brother, the end is nigh!
World markets are like a pie crust stretched across the roof of a volcano!
Fu Manchu is about to pull the lever to the trap door!
Warbucks signals the trusty Punjab to cut the cords of the rope bridge!
Grease the skids! Happy tobogganing!
It would be a DISASTER just for the markets to go back to where they were 12 months ago...maybe even six.
I never remember such a condition....
In reply to The end is nigh, brother,… by Richard640
US futures right.... next door is the gold manipulation, but that is allowed... Cool !
its only illegal, when the Government hasn't sanctioned it.
In reply to US futures right.... next… by Jambo Mambo Bill
Eric Holder would defend them, no worries.
I guess this is good news.
What?
Banksters going to jail???? ... I can't believe my eyes!
Oh, never mind, none will do any jail time. ... They'll be fined a small portion of what they stole.
Maybe I should try that. ........ I wonder what would happen to me?
Live Hard, That's Called 'Business Overhead', Die Free
~ DC v8.6
Buckwheat Obama would take those fines and give to his favorite left wing groups.....but he gone
In reply to What?… by DuneCreature
The SEC under Trump will pay their porn site membership bills and hire 'New-Age Of-Age Dizzy Blond Hookers ©' for the big office party with the proceeds of their most recent collar.
Party With The Perps! is what they call that festive little mid-winter get together over at SEC Legal HQ.
Live Hard, Don't Kid Yourself About The Regime Change, It Is Business As Usual On Wall Street, Except For A Fresh Gaggle Of Blond Bimbos Have Replaced The Cross Dressers And Cub Scouts, Die Free
~ DC v8.6
In reply to Buckwheat Obama would take… by JoseyWalesTheOutlaw
Yup, the "business overhead" you mention is the underlings going to jail not those in power.
In reply to What?… by DuneCreature
Europe! Europe! Europe!
USA! USA! USA!
There won't be many, there won't be fucking any, no there won't be many going home.
Let the Games begin!
" Once the names of market riggers are revealed we will promptly follow up, although we are sad to advise readers that the biggest manipulator of all will sadly be spared. "
and what of the insider front runners that are all the other Central Bankers like the Swiss National Bank who just played the market beautifully....
market niggers got nothing to do with this.........Honey, I can't find my glasses this morning can you help me look for them
In reply to " Once the names of market… by J J Pettigrew
"spoofing is a criminal offense".... LOL, get the fuck outta here.
Comey will have to come save HSBC again.................wait
Spoofing ...
LMAO
Hollywood couldn't write this script ..
The whole thing is SPOOFED
Notice how its always the foreign banks?
How many arrests at Wells Fraudco just as an example?
When a Banker in the US spills a big hot load of spoof on "the Market", nobody cares.... Its not that complicated, you wankers across the pond best keep your spoof in your pants until further notice.
In reply to Notice how its always the… by williambanzai7
See my shocked face; meanwhile, Jon Corzine & Cankles Clinton walk free, as i guess its more important to end spoofing than it is Corzines outright theft of over a billion dollars, & Cankles selling the U.S. down the river, not to mention Haitian kids. What a great country; WTF.
www,traderzoogold.blogspot.com
This begs the question of which market UBS will rig next or is already rigging?
Judge Roy Bean.......... Trust in my judgment of the book. Besides, you're gonna hang no matter what it says in there, 'cause I am the law, and the law is the handmaiden of justice. Get a rope.
Silly stock futures spoofers - they got caught. Should have stuck to dumping $2 billion in gold futures into an illiquid market at 2:00 AM - that is totally safe!
What about all the fake HFT manipulations?
Rick: How can you close me up? On what grounds?
Captain Renault: I'm shocked, shocked to find that gambling is going on in here!
[a croupier hands Renault a pile of money].
Croupier: Your winnings, sir.
Captain Renault: [sotto voce] Oh, thank you very much. [aloud].
(Casablanca, 1942)
When nine hundred years old you become, look this good you will not.
Just throw some small fry into the deep fryer and claim "we be on da job".
I am certain no one at the top had even a slight clue this was going on, and will be shocked.
When/as Wells Fargo fucks over it's customers, the top never new it was happening.
Exactly .. every time I read these type of articles, it makes me sick as to what is called law enforcement in the US ... USELESS penalties.., not a deterrent but a motivator
In reply to Just throw some small fry… by wmbz
The public will only be satisfied if it results in jail sentences.
Large fines are a complete waste of time as a means of punishment.
Pagination