Recent Swap Manipulation Cases
Arent Fox, Les Jacobowitz, 24 February 2021
In recent years, the Commodity Futures Trading Commission (CFTC) filed two actions with facts so shocking the reader is forced to ask, ‘can this be how the industry really functions?’
The Complaints –
The most recent action was filed in February of 2021 in U.S. District Court in the Southern District of New York (SDNY) against a U.S. dollar swaps trader and managing director of a global investment bank for “engag[ing] in a scheme to deceive and to manipulate the price of U.S. dollar interest rate swap spreads…” 1 The facts of this case are very similar to those of a case filed a little more than a year ago – a bond issuance with a governmental issuer, and the pricing of a related swap through an interdealer broker firm. Both cases illustrate potential flagrant violations of the Commodity Exchange Act (“CEA”) and CFTC regulations.
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