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

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Merrill Lynch Pays $36.5 Million to Settle Spoofing Charges

Aziz Abdel-Qader

Finance Magnates, 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.

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Release: Merrill Lynch Commodities Inc. Enters into Corporate Resolution and Agrees to Pay $25 Million in Connection with Deceptive Trading Practices Executed on U.S. Commodities Markets

Release

Merrill Lynch Commodities Inc. Enters into Corporate Resolution and Agrees to Pay $25 Million in Connection with Deceptive Trading Practices Executed on U.S. Commodities Markets

DOJ, 25 June 2019

Merrill Lynch Commodities Inc. (MLCI), a global commodities trading business, has agreed to pay $25 million to resolve the government’s investigation into a multi-year scheme by MLCI precious metals traders to mislead the market for precious metals futures contracts traded on the Commodity Exchange Inc. (COMEX), announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office.

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Article: Key to catching the traders charged with manipulating metals futures: electronic chatter

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Key to catching the traders charged with manipulating metals futures: electronic chatter

Francine McKenna

MarketWatch, 30 January 2018

The Commodity Futures Trading Commission announced criminal and civil enforcement actions on Monday against Deutsche Bank AG and Deutsche Bank Securities Inc, UBS AG and HSBC Securities (USA) Inc. and six individuals involved in spoofing and stop loss collusion schemes. The criminal and civil enforcement actions were filed in conjunction with the Department of Justice and Federal Bureau of Investigation’s Criminal Investigative Division.

Deutsche Bank AG and Deutsche Bank Securities Inc. were hit the hardest, agreeing to pay a $30 million penalty while neither admitting or denying they failed to supervise precious metals traders who allegedly schemed to manipulate the price of precious metals futures contracts and allegedly colluding to trigger customer stop-loss orders. The fraud allegedly ran from Feb. 2008 to at least Sept. 2014.

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Article: Federal Charges Filed in Price ‘Spoofing’ Inquiry on Wall St.

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Federal Charges Filed in Price ‘Spoofing’ Inquiry on Wall St.

Emily Flitter

New York Times, 29 January 2018

Federal authorities have filed civil and criminal charges against a group of Wall Street banks and individuals that they say tried to manipulate markets in gold, silver and certain financial products, including by showing potential customers fake prices.

The actions, filed over the past several days, are part of a yearslong effort by financial regulators and the Department of Justice to stamp out behavior that gives the biggest banks an advantage over smaller market players.

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Release: CFTC Orders Deutsche Bank to Pay $30 Million Penalty for Manipulation, Attempted Manipulation, and Spoofing In the Precious Metals Futures Markets

Release

CFTC Orders Deutsche Bank to Pay $30 Million Penalty for Manipulation, Attempted Manipulation, and Spoofing In the Precious Metals Futures Markets

CFTC, 29 January 2018

The Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against Deutsche Bank AG (DB AG) and Deutsche Bank Securities Inc. (DBSI) (collectively, DB), requiring DB to pay a $30 million civil monetary penalty and to undertake remedial relief. The Order finds that from at least February 2008 and continuing through at least September 2014, DB AG, by and through certain precious metals traders (Traders), engaged in a scheme to manipulate the price of precious metals futures contracts by utilizing a variety of manual spoofing techniques with respect to precious metals futures contracts traded on the Commodity Exchange, Inc. (COMEX), and by trading in a manner to trigger customer stop-loss orders.

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Article: Former Deutsche Bank trader banned for ‘spoofing’

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Former Deutsche Bank trader banned for ‘spoofing’

Dave Michaels

MarketWatch, 2 June 2017

A former futures trader at Deutsche Bank AG was permanently barred from the industry after admitting he conspired to manipulate the price of gold and silver futures contracts.

David Liew, a trader who was based in Singapore, also pleaded guilty in federal criminal court in Illinois on Thursday to using illegal spoofing techniques from 2009 to 2012. Regulators and prosecutors have cracked down on spoofing, which involves sending fake offers intended to push prices in a direction that benefits the trader’s other orders. Congress made it illegal through the 2010 Dodd Frank financial overhaul law.

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Article: Merrill Lynch fined for violating cotton-speculation limits

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Merrill Lynch fined for violating cotton-speculation limits

Kevin G. Hall

McClatchy Newspapers, 7 December  2011

A key financial regulator said Wednesday that it had fined Wall Street powerhouse Merrill Lynch $350,000 for violating rules that limit how many speculative contracts it can hold in markets where bets are made on the price of cotton for future delivery.

The Commodity Futures Trading Commission said that Merrill Lynch Commodities Inc., a subsidiary of Bank of America, repeatedly had violated limits on how many Cotton No. 2 futures contracts it was allowed to hold. Futures are bets on where the price of a given commodity will be for future delivery.

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Article: SEC under Schapiro struggles to turn around amid political, financial head winds

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SEC under Schapiro struggles to turn around amid political, financial head winds

David S. Hilzenrath

Washington Post, 7 October 2011

Mary L. Schapiro took over a discredited SEC in early 2009 and vowed to rebuild it.

She promised tougher enforcement — “war without quarter” on financial fraud. Modernized rules to keep up with Wall Street. And a new, more effective organization.

Her tenure at the federal agency responsible for protecting investors and policing markets offers a Washington lesson: Even when epic crises create a sense of urgency, it is tough to tighten the reins on powerful industries. Dramatic results can prove elusive.

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Article: Whistle. Then Worry and Wait.

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Whistle. Then Worry and Wait.

Edward Wyatt

New York Times, 9 October 2010

Sitting in a Minneapolis mansion and listening to a charismatic investment manager describe a currency trading system that kept earning handsome returns year after year, Arthur F. Schlobohm IV was certain he had stumbled onto a Ponzi scheme.

A longtime trader who started running tickets on the floor of the New York Stock Exchange as a teenager, Mr. Schlobohm, known as Ty, knew that Minneapolis, his home for nine years, was too small a town for a $4.4 billion investment fund to have escaped his notice.

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