Category: Publications

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Article: Merrill Lynch fined by Seoul authority for profiteering from spoofing

Article - Media

Merrill Lynch fined by Seoul authority for profiteering from spoofing

Chung Seung-hwan, Choi Mira

Pulse, 17 July 2019

South Korea’s stock exchange authority Korea Exchange (KRX) slapped a fine of 175 million won ($148,242) on U.S. brokerage Bank of America Merrill Lynch for violating domestic rules and distorting market through algorithmic high-frequency spoofing.

Merrill Lynch has been accused of abetting 6,200 spoofing activities while handling 80 trillion won worth deals commissioned by American hedge fund Citadel Securities from October 2017 to May 2018. Over the period, Citadel was found to have profiteered about 220 billion won, according to KRX.

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Article: Chat room messages are ‘smoking gun’ in $25 million Merrill CFTC spoofing penalty

Article - Media

Chat room messages are ‘smoking gun’ in $25 million Merrill CFTC spoofing penalty

Todd Ehret

Reuters, 17 July 2019

The U.S. Commodities Futures Trading Commission (CFTC) last month chalked up another impressive settlement over the market manipulation tactic known as “spoofing.” The $25 million penalty for Merrill Lynch Commodities in the case is the second largest related to spoofing.

Like many of the prior cases, where the firms cooperated with the investigations and were given credit for doing so, the proverbial “smoking gun” in the case was the record of online chat rooms where traders discussed markets, prices, and their strategies and actions.

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Article: Vistra wraps up Crius Energy acquisition

Article - Media, Publications

Vistra wraps up Crius Energy acquisition

Renewables Now, 16 July 2019

Texas-based company Vistra Energy Corp (NYSE:VST) has completed the acquisition of electricity and gas retailer Crius Energy Trust (TSE:KWH.UN), which will be delisted from the Toronto Stock Exchange tomorrow.

The parties announced the closing of the transaction on Monday. Crius Energy’s unitholders will receive CAD 8.8 (USD 6.75/EUR 6) per unit this week. In addition, holders of record on March 26, 2019 are also getting a distribution of CAD 0.209 per unit, a previously declared by Crius.

The company is expected to be wound-up following the redemption of the trust units on July 18.

Crius Energy is an independent energy marketer of retail electricity, natural gas and solar products to residential and commercial customers. In its report for the first quarter of 2019, it noted that it was in the advanced stages of winding down its solar installation business known as Verengo. Total revenues for the quarter amounted to USD 296.4 million (EUR 263m), including USD 240 million in electricity revenue, USD 54.5 million from natural gas, and just USD 1.9 million from the solar business.
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Article: Merrill Lynch Commodities receives $25m fine for spoofing and market manipulation (15 July 2019)

Article - Media

Merrill Lynch Commodities receives $25m fine for spoofing and market manipulation (15 July 2019)

Jennie Clarke

Behavox, 15 July 2019

Merrill Lynch Commodities Inc has received a $25m charge from the US Commodity Futures Trading Commission (CFTC) for spoofing, manipulation and attempted manipulation, with respect to certain precious metals futures.

The CFTC found that Merrill Lynch Commodities traders placed orders to buy and sell precious metals futures contracts with the intent to cancel their orders before execution. The traders employed a specific spoofing strategy in which they would place a small bid or offer with the intent to execute that order. Prior to the execution of that order, they would place a larger order on the opposite side of the same market with the intent to cancel that order before execution. This manipulated market prices and created artificial and fluctuating prices.

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Article: Vistra Energy Completes Acquisition of Crius Energy Trust

Article - Media, Publications

Vistra Energy Completes Acquisition of Crius Energy Trust

Crius Energy Trust, 15 July 2019

Vistra Energy (NYSE: VST) and Crius Energy Trust (“Crius Energy”) (TSX: KWH.UN) today announced the successful completion of the previously announced acquisition by Vistra of the business of Crius Energy. The closing of the transaction follows the overwhelming approval of the transaction by Crius Energy unitholders at the special meeting of unitholders held on March 28, 2019, and the receipt of all required regulatory approvals, including approval from the Federal Energy Regulatory Commission on July 8, 2019. As a result of the closing today, Crius Energy unitholders are entitled to receive C$8.80 per trust unit upon the redemption of such units. In addition, Crius Energy unitholders that were holders of record on March 26, 2019 will receive C$0.209 per unit for the distribution previously declared by Crius Energy on Jan. 16, 2019. The combination of these amounts results in total cash payable to Crius Energy unitholders of C$9.009 per unit. Crius Energy expects that the distribution of C$0.209 per unit will be payable today, with the transaction consideration of C$8.80 payable within three business days of today’s date. The units of Crius Energy are expected to be delisted from the Toronto Stock Exchange as of the close of markets on July 17, 2019, and Crius Energy is expected to be wound-up following the redemption of the trust units on July 18, 2019.
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Article: Bank Of America, Morgan Stanley Again Accused Of Spoofing

Article - Media

Bank Of America, Morgan Stanley Again Accused Of Spoofing

Rachel Graf

Law360, 12 July 2019

Morgan Stanley & Co. LLC, Bank of America Corp. and its subsidiary Merrill Lynch Commodities Inc. engaged in spoofing in an effort to manipulate precious metals futures, according to a proposed class action filed Friday in New York federal court.

Three New York investors claim the banks, two former Merrill Lynch traders and 18 unnamed individual defendants manipulated gold, silver, platinum and palladium futures through a spoofing scheme in which they placed buy or sell orders that they intended to cancel. The practice simulates supply or demand, allegedly allowing the banks to profit from the swings in prices.

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Article: Online food delivery comes with a side of fraud

Article - Media, Publications

Online food delivery comes with a side of fraud

Monica Eaton-Cardone, 12 July 2019

Digital payments and remote channels were generally slower to gain traction in the food and beverage sector compared to other retail outlets. Now, though, the industry is making up for that delayed adoption.

Digital channels in the industry now demonstrate rapid YoY growth. Total delivery sales in food service in the U.S. reached $34 billion in 2018, representing a 13% increase compared to the previous year.

Much of that boost took the form of food delivery apps like DoorDash, Uber Eats, Grubhub, or Postmates, as well as merchants’ own individual apps. Overall, food delivery represented roughly 37% of restaurant industry sales.
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Article: Part 9 of Illegal Naked Shorting Series: The Risk/ Reward of Shorting Versus Buying Stocks is Extremely Unfavorable

Article - Media

Part 9 of Illegal Naked Shorting Series: The Risk/ Reward of Shorting Versus Buying Stocks is Extremely Unfavorable

Larry Smith

Smith On Stocks, 11 July 2019

In this report, I contrast the risk and reward of shorting versus buying stocks. When you unravel the economics and risk/ reward of shorting, it is clear to me that this is a highly risky, low return strategy. As argued in this report, I see shorting as a losers game if employed consistently over time as opposed to buying stocks which is a winners game. I see shorting as a niche strategy that is applicable on a short term trading basis for a very limited number of stock trades. I think you will agree with me as I go through the major risk and reward elements of shorting.

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Article: Part 8: Illegal Naked Shorting Series: Who or What is Cede and What Role Does Cede Play in the Trading of Stocks?

Article - Media

Part 8: Illegal Naked Shorting Series: Who or What is Cede and What Role Does Cede Play in the Trading of Stocks?

Larry Smith

Smith On Stocks, 1 July 2019

ost investors when they buy a publicly traded stock believe that they own a part of some company. They think that somewhere there is a stock certificate or some indication of ownership that has their name on it, but this is not the case. When you buy a “stock” you are actually purchasing a security that affords certain entitlement rights related to registered stock which actual owners hold. The registered shares of a private company are directly owned by shareholders. In contrast, the registered shares of nearly all publicly traded equities are owned by Cede & Co., which is the nominee of the Depository Trust Company (DTC). (A nominee is a company whose name is given as having title to a stock, but does not receive the financial benefits of ownership.) Cede is a subsidiary of the Depository Trust Company (DTC) which is a subsidiary of the Depository Trust and Clearing Corporation (DTCC) and the DTCC is a private company owned by elite Wall Street firms and money center banks. If you need background or a refresher on DTC and DTCC, click on this link. Effectively, elite Wall Street firms and money center banks, not institutions and individual investors, own almost all of the registered shares of publicly traded companies in the US.

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See All Larry Smith Posts @ SNSS

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Release: Pawar Law Group Reminds Investors of July 29 Deadline in Securities Class Action Lawsuit Against Bloom Energy Corporation – BE

Release

Pawar Law Group Reminds Investors of July 29 Deadline in Securities Class Action Lawsuit Against Bloom Energy Corporation – BE

1 July 2019

Pawar Law Group announces that a class action lawsuit has been filed on behalf of shareholders who purchased shares of Bloom Energy Corporation (: BE) pursuant and/or traceable to Bloom Energy’s false and/or misleading registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with Bloom Energy’s initial public offering completed in July 2018 (the “IPO”). The lawsuit seeks to recover damages for Bloom Energy investors under the federal securities laws. If you wish to serve as lead plaintiff, you must move the Court no later than July 29, 2019. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.

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Article: Marc Cohodes’ Last Stand – Part One: Encountering the Fraud

Article - Media, Publications

Marc Cohodes’ Last Stand – Part One: Encountering the Fraud

Real Vision, 01 July 2019

This is the first part of the groundbreaking January 2019 interview between Real Vision co-founder Grant Williams (NYSE:WMB) and legendary short seller Marc Cohodes. In this clip from the long conversation, the two introduce Cohodes’ battle to expose the truth about pharmaceutical giant MiMedx. This is excerpted from a video published on Real Vision on February 1, 2019 entitled “Fraud, Intimidation and Truth: Marc Cohodes’ Last Stand.” Continue reading “Article: Marc Cohodes’ Last Stand – Part One: Encountering the Fraud”

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Article: Catch of the Week — Merrill Lynch Commodities Inc.

Article - Media, Publications

Catch of the Week — Merrill Lynch Commodities Inc.

CONSTANTINE CANNON, 28 June 2019

Merrill Lynch Commodities Inc (“Merrill”), a commodity trading subsidiary of Bank of America Corporation, agreed on June 25th to two $25 million settlements with both the Department of Justice (“DOJ”) and the Commodity Futures Trading Commission (“CFTC”) to resolve allegations it conducted deceptive trading practices in United States commodities markets. Continue reading “Article: Catch of the Week — Merrill Lynch Commodities Inc.”

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Filing: Gamma vs Merrill Lynch, Morgan Stanley

Filing

Gamma vs Merrill Lynch, Morgan Stanley

CourtListener, 27 June 2019

This action arises from Defendants’ unlawful and intentional manipulation of COMEX Gold Futures, COMEX Silver Futures, NYMEX Platinum Futures, and NYMEX Palladium Futures contracts, and options on those futures contracts (collectively, “precious metals futures contracts”) traded on the New York Mercantile Exchange (“NYMEX”) and the Commodity Exchange, Inc. (“COMEX”) from approximately January 1, 2008 through December 31, 2014 (the “Class Period”) in violation of the Commodity Exchange Act, 7 U.S.C. §§ 1, et seq. (the “CEA”) and the common law.

PDF (29 pages): Gamma vs Merrill Lynch, Morgan Stanley

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Article: Merrill Lynch to pay $25M to settle metals ‘spoofing’ claims

Article - Media, Publications

Merrill Lynch to pay $25M to settle metals ‘spoofing’ claims

Jaclyn Jaeger, 27 June 2019

Merrill Lynch Commodities, a global commodities trading business, will pay a combined $25 million in criminal fines, restitution, and forfeiture of trading profits to resolve a government investigation into a multi-year scheme to mislead the market for precious metals futures contracts traded on the Commodity Exchange, the Department of Justice announced.

According to MLCI’s admissions, from 2008 through 2014, precious metals traders employed by MLCI schemed to deceive other market participants with materially false and misleading information. They did so by placing fraudulent orders for precious metals futures contracts that, at the time the traders placed the orders, they intended to cancel before execution. Continue reading “Article: Merrill Lynch to pay $25M to settle metals ‘spoofing’ claims”

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Article: Merrill Lynch Pays $36.5 Million to Settle Spoofing Charges

Article - Media, Publications

Merrill Lynch Pays $36.5 Million to Settle Spoofing Charges

Aziz Abdel-Qader, 26 June 2019

Merrill Lynch Commodities, Inc. (MLCI) has just settled spoofing charges with the Commodity Futures Trading Commission (CFTC) by agreeing to pay a combined $36.5 million. The CFTC action centered on spoofing activity carried out by Bank of America’s global commodities trading business in a scheme that ran from 2008 through 2014 and involved dozens of fraudulent orders that were canceled before execution.

MLCI precious metals traders are accused of working with other traders to rig the purchase and sale of futures contracts on the Chicago Mercantile Exchange and the Chicago Board of Trade. Continue reading “Article: Merrill Lynch Pays $36.5 Million to Settle Spoofing Charges”

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