London Gold Fix study suggests decade of bank manipulation
Bloomberg News, 28 February 2014
The London gold fix, the benchmark used by miners, jewellers and central banks to value the metal, may have been manipulated for a decade by the banks setting it, researchers say.
Unusual trading patterns around 3 p.m. in London, when the so-called afternoon fix is set on a private conference call between five of the biggest gold dealers, are a sign of collusive behavior and should be investigated, New York University’s Stern School of Business Professor Rosa Abrantes-Metz and Albert Metz, a managing director at Moody’s Investors Service, wrote in a draft research paper.
“The structure of the benchmark is certainly conducive to collusion and manipulation, and the empirical data are consistent with price artificiality,” they say in the report, which hasn’t yet been submitted for publication. “It is likely that co-operation between participants may be occurring.”
The paper is the first to raise the possibility that the five banks overseeing the century-old rate —Barclays Plc, Deutsche Bank AG, Bank of Nova Scotia, HSBC Holdings Plc and Societe Generale SA — may have been actively working together to manipulate the benchmark. It also adds to pressure on the firms to overhaul the way the rate is calculated. Authorities around the world, already investigating the manipulation of benchmarks from interest rates to foreign exchange, are examining the $20 trillion gold market for signs of wrongdoing.
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Remember those lovable blue cartoon characters, the Smurfs? First created and introduced as a comic strip series of characters by the Belgian artist Peyo (pen name of Pierre Culliford) in 1958, the Smurfs were brought to Belgian television in the early 1970s and then introduced to countries outside Belgium through the full-length feature the Magic Flute soon afterward.
Interestingly, the word “Smurf” is the original Dutch translation of the French “Schtroumpf” which, according to Peyo, is a word invented during a meal with fellow cartoonist André Franquin, when he could not remember the word “salt.”
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10 weapons Wall Street uses to manipulate you
Paul B. Farrell, 18 February 2014
New “Infinity Machine!” Yes. “Quantum Leap?” Yes. “The Future of Computing?” Well, no IPO yet. No Dell laptops. But wow, Time’s cover story sure is heaping praise on the amazing new quantum physics computer technology:
New quantum computing “promises to solve some of humanity’s most complex problems … backed by Jeff Bezos, NASA and the CIA … each costs $10,000,000 … operates at 459 degrees below zero.” Even the fact that “nobody knows how it actually works” isn’t a problem, says Time’s Lev Grossman. Why? Quantum computing “will change how we cure disease, explore the heavens and do business on Earth.”
But is it really a miracle-worker? Will it come with a moral conscience? Know right from wrong? Or will the amazing “Infinity Machine” just be the next generation of superhot, but soulless big-data processors? Ask yourself: Continue reading “Article: 10 weapons Wall Street uses to manipulate you”
Inside the New Currency Hedged ETFs from iShares
Eric Dutram, 12 February 2014
As the taper begins to ravage international markets, investors in the ETF world are starting to see the impact of currencies on foreign holdings. Many currencies are slumping against the U.S. dollar, and this is really having a huge negative impact on stock prices when investors adjust returns back to American currency.
Thanks to this currency slide and the possibility of a strong dollar, investors are starting to embrace currency-hedged ETFs in droves. Several have proven their worth over the past few months and they have really begun to build up assets as a result, leading other ETF issuers to consider jumping in on the market as well (see all the Top Ranked ETFs here).
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Hogan Lovells Delivers Victory in $150 Million Fraud Case for Leading Russian Financial Group Otkritie
Legal Monitor, 12 February 2014
London’s High Court has delivered its judgment today on a multi-million dollar fraud against Otkritie, one of the largest financial services providers in Russia. Otkritie was defrauded by a group of former employees and their associates. Today’s judgment paves the way for the recovery of millions in already frozen assets and awards significant damages to Otkritie. Hogan Lovells has advised Otkritie throughout the dispute. Continue reading “Article: Hogan Lovells Delivers Victory in $150 Million Fraud Case for Leading Russian Financial Group Otkritie”
Formerly senior vice president and general counsel for Overstock.com, Griffin has been responsible for the strategic direction and operational effectiveness of the legal team. Under his direction, the legal department has repeatedly seen success in fighting high-profile patent troll suits, and in working with the U.S. Congress, regulatory agencies and state legislatures on key legislation and regulatory matters, affecting the retail sector and public companies. Griffin’s new position will expand his responsibilities in these and other areas.
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Currency trading scandals are the next big black eye for banks
Mark DeCambre, Jason Karaian
Quartz, 5 February 2014
These days, it doesn’t take much digging to find potentially scandalous behavior coursing through the world’s biggest banks. But the latest round of probes into currency trading are shaping up to be a real doozy.
Already more than 20 traders, which make money for their firms by betting on currencies’ shifting values, have left or been placed on leave by their employers. These banks and traders have not been accused of wrongdoing, but their departures send a message that something is amiss in currency trading.
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Florida state professors settle naked short-selling case
Sarah N. Lynch, 01 February 2014
WASHINGTON (Reuters) – Two Florida State University professors who specialize in financial markets and physics will pay more than $670,000 to settle civil charges that they carried out an illegal short-selling scheme using an elaborate options strategy, U.S. regulators said on Friday.
Gonul Colak and Milen Kostov settled with the Securities and Exchange Commission without admitting or denying the charges. Continue reading “Article: Florida state professors settle naked short-selling case”