Tag: Libor

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Article: How ex-JP Morgan silver trader’s guilty plea could boost manipulation claim against bank

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How ex-JP Morgan silver trader’s guilty plea could boost manipulation claim against bank

Dawn Giel, Dan Mangan, 13 November 2018

A previously secret guilty plea by a former commodity trader at J. P. Morgan Chase, who admitted that he rigged precious metals markets, has drawn the attention of a lawyer who has already accused traders at the nation’s largest bank of similar conduct.

The lawyer, David Kovel, told CNBC he was struck by how much in common his civil case pending in New York federal court against J. P. Morgan Chase has with the conduct outlined in the ongoing criminal case in Connecticut against John Edmonds.

Edmonds, a 36-year-old Brooklyn resident, pleaded guilty in October to fraudulently manipulating the precious metals markets from 2009 to 2015.

He admitted working with “unnamed co-conspirators” at his former employer, J. P. Morgan, the Justice Department made public Nov. 6, when it unsealed the case in U.S. District Court in Connecticut.

Edmonds’ criminal plea related to “spoofing,” a certain type of improper trading that has been the subject of a broader regulatory crackdown on market manipulation in the decade since the 2008 financial crisis.

So far this year, the Commodity Futures Trading Commission has announced 26 enforcement actions that involved market manipulation, attempted manipulation, false reporting, spoofing or deceptive conduct. That is more than double the number in 2017 — and six times that in 2016.

Prosecutors said Edmonds learned the deceptive strategy “from more senior traders” at the bank, and that he “personally deployed this strategy hundreds of times with the knowledge and consent of his immediate supervisors.” His guilty plea related specifically to trading in silver futures contracts, as well as in gold, platinum and palladium futures.

Nearly four years ago, Kovel sued J. P. Morgan on behalf of a colorful hedge fund operator and big-stakes poker player, Daniel Shak, and two metals traders, Mark Grumet and Thomas Wacker. The civil lawsuit accused J. P. Morgan of manipulating the silver futures market from 2010 through 2011, costing Kovel’s clients $30 million in losses.

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Article: LIBOR, FX and Key Benchmark Rigging Claims against RBS, Barclays, HSBC & Lloyds set to Strengthen for Customers Mis-sold Derivatives

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LIBOR, FX and Key Benchmark Rigging Claims against RBS, Barclays, HSBC & Lloyds set to Strengthen for Customers Mis-sold Derivatives

Jaron Dosanjh, 09 March 2018

The door has been opened by the Court of Appeal in PAG v RBS [2018] for misrepresentation claims to be brought by a counter-party to a derivative which is linked to LIBOR, FX or key benchmark where the Swap is with a bank which has been found to have engaged in the manipulation of a benchmark.

This judgment is now the leading authority on claims concerning a customer’s ability to rescind contracts with a bank that has manipulated the London Interbank Offered Rate (LIBOR). Although this case focused on LIBOR-linked derivatives, the same principles will surely apply to other key benchmark rigging (including the manipulation of FX markets).

This decision will be of particular interest to customers that believe they have been mis-sold a Forex hedging products or a LIBOR-linked derivative. These customers of RBS, Barclays, HSBC and Lloyds Plc may potentially have grounds to rescind the derivative contract if the implied representations made by the banks are considered false due to regulatory findings of benchmark rigging. RBS, Barclays, HSBC and Lloyds Plc have all either undermined the integrity of LIBOR or have been fined for Forex failings.

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Article: Deutsche Bank Ordered to Pay $70 Million for Manipulation of USD Swap Rates

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Deutsche Bank Ordered to Pay $70 Million for Manipulation of USD Swap Rates

Finance Magnates Staff, 02 February 2018

The Commodity Futures Trading Commission (CFTC) issued an order directed at Deutsche Bank Securities Inc. (DBSI), to pay a $70 million civil monetary penalty over charges of attempted manipulation of the ISDAFIX benchmark, between 2007 and 2012.

The US Dollar International Swaps and Derivatives Association Fix is a global benchmark, used in the settlement of various interest rate products, including cash settlement of options on interest rate swaps. The allegations indicate that Deutsche Bank and some of its traders intentionally attempted to manipulate the benchmark, in an effort to benefit the bank’s positions. The specific USD ISDAFIX rates and spreads that the bank attempted to alter are the ones issued at 11:00 a.m. Eastern Time each day, and act as a mid-market rate to accommodate settlements across various financial markets. Continue reading “Article: Deutsche Bank Ordered to Pay $70 Million for Manipulation of USD Swap Rates”

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Article: UK central bank drawn into market manipulation scandal

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UK central bank drawn into market manipulation scandal

Associated Press, 10 April 2017

LONDON – British politicians are seeking an investigation into allegations that the Bank of England was also involved in manipulating a key market interest rate during the financial crisis.

The BBC says it has a recording from 2008 between officials at Barclays bank that indicates the Bank of England was trying to influence the interest rate, called Libor. Several banks have been fined billions for tampering with the interest rate, which is used to price services like loans globally.

Labour party lawmaker John McDonnell says “this is an extremely serious revelation that contradicts past assurances about the role of the Bank of England in the Libor scandal.”

The central bank told the BBC that Libor was not regulated at the time and that it has been helping in past investigations.

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Article: Deutsche Bank’s $10-Billion Scandal

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Deutsche Bank’s $10-Billion Scandal

Ed Caesar, 22 August 2016

Almost every weekday between the fall of 2011 and early 2015, a Russian broker named Igor Volkov called the equities desk of Deutsche Bank’s Moscow headquarters. Volkov would speak to a sales trader—often, a young woman named Dina Maksutova—and ask her to place two trades simultaneously. In one, he would use Russian rubles to buy a blue-chip Russian stock, such as Lukoil, for a Russian company that he represented. Usually, the order was for about ten million dollars’ worth of the stock. In the second trade, Volkov—acting on behalf of a different company, which typically was registered in an offshore territory, such as the British Virgin Islands—would sell the same Russian stock, in the same quantity, in London, in exchange for dollars, pounds, or euros. Both the Russian company and the offshore company had the same owner. Deutsche Bank was helping the client to buy and sell to himself. Continue reading “Article: Deutsche Bank’s $10-Billion Scandal”

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Article: Barclays, Citicorp, JPMorgan, RBS, and UBS Enter Guilty Pleas Stemming from Collusion and Fraud in Foreign Exchange Market; Banks Agree to Pay More Than $5.8 Billion in Fines for Misconduct

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Barclays, Citicorp, JPMorgan, RBS, and UBS Enter Guilty Pleas Stemming from Collusion and Fraud in Foreign Exchange Market; Banks Agree to Pay More Than $5.8 Billion in Fines for Misconduct

GLOBE NEWSWIRE, 20 May 2015

Hausfeld, a global claimants’ firm dedicated to handling complex litigation, announced today that five defendants in In re Foreign Exchange Benchmark Rates Antitrust Litigation, 13-cv-7789 (S.D.N.Y.), have agreed with the U.S. Department of Justice to plead guilty to violating U.S. law through their conduct in the foreign exchange (“FX”) market. Barclays PLC, Citicorp, JPMorgan Chase & Co., and The Royal Bank of Scotland PLC pled guilty to violating U.S. antitrust laws. UBS AG pled guilty to wire and mail fraud after the DOJ determined that UBS’s misconduct in the FX market had breached UBS’s prior non-prosecution agreement for LIBOR-related misconduct. The guilty pleas entered today reflect widespread collusion in the FX market over a period of several years.

In addition to the guilty pleas, the banks agreed to pay more than $2.7 billion to the Department of Justice to resolve the DOJ’s FX investigations. The Federal Reserve imposed further fines of more than $1.6 billion on affiliates of the same five banks and a fine of $205 million on Bank of America Corporation for “unsafe and unsound practices.” Barclays will also pay a $1.3 billion fine as part of settlements with the New York Department of Financial Services, the Commodity Futures Trading Commission, and the Financial Conduct Authority. Continue reading “Article: Barclays, Citicorp, JPMorgan, RBS, and UBS Enter Guilty Pleas Stemming from Collusion and Fraud in Foreign Exchange Market; Banks Agree to Pay More Than $5.8 Billion in Fines for Misconduct”

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Article: Four Banks Plead Guilty To Foreign Exchange Collusion, UBS Pleads Guilty To Wire Fraud

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Four Banks Plead Guilty To Foreign Exchange Collusion, UBS Pleads Guilty To Wire Fraud

Antoine Gara, 20 May 2015

U.S. banking giants Citigroup and JPMorgan Chase and U.K.-base conglomerates Barclays and The Royal Bank of Scotland have agreed to plead guilty antitrust violations stemming from their collusion to manipulate prices in the foreign exchange market over the course of five years, the Department of Justice said on Wednesday. Those banks and UBS have agreed to pay a total of $5.8 billion in fines to global regulators as part of their FX market collusion.

Five banks will pay the Department of Justice nearly $3 billion in fines and penalties for their manipulation of U.S. dollar and Euro exchange rates, which the DoJ characterized as occurring “almost every day for five years” through private chat rooms, benefiting their trading positions but harming countless consumers and investors around the world. Separately, the Federal Reserve said on Wednesday, six banks would pay a total of $1.8 billion in fines for “unsafe and unsound practices” in the FX market. Continue reading “Article: Four Banks Plead Guilty To Foreign Exchange Collusion, UBS Pleads Guilty To Wire Fraud”

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Article: UBS pays $545m to settle foreign exchange probe

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UBS pays $545m to settle foreign exchange probe

BBC News, 20 May 2015

Swiss bank UBS has paid US authorities a total of $545m (£352m) to settle an investigation into the manipulation of foreign exchange rates.

The total includes a $203m fine after UBS pleaded guilty to a charge it rigged Libor benchmark interest rates. UBS announced the move hours before US and UK authorities said five banks were to pay fines totalling $5.7bn related to the foreign exchange investigation.

The others are JPMorgan, Citigroup, Barclays and RBS. UBS said it had settled with the US Department of Justice, the US Federal Reserve and the Connecticut Department of Banking. Continue reading “Article: UBS pays $545m to settle foreign exchange probe”

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Article: Swiss Bank UBS To Pay $342 Million Currency Manipulation Fine, Plead Guilty On LIBOR

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Swiss Bank UBS To Pay $342 Million Currency Manipulation Fine, Plead Guilty On LIBOR

Antoine Gara, 20 May 2015

UBS said on Wednesday morning it would pay a $342 million fine for its involvement in manipulating the foreign exchange market, averting criminal prosecution as a result of its cooperation in the multi-year probe. The Swiss banking giant, however, will plead guilty to one count of wire fraud for its role in manipulating interest rate benchmarks such as LIBOR, paying a $202 million fine, and tearing up a previously agreed 2012 deferred prosecution agreement with U.S. regulators.

The collective $545 million in fines and guilty plea will help UBS put to rest some of its largest legal issues in the United States and won’t have a financial impact given the bank’s exiting provisions for litigation. Continue reading “Article: Swiss Bank UBS To Pay $342 Million Currency Manipulation Fine, Plead Guilty On LIBOR”

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Article: 5 big banks pay $5.4 billion for rigging currencies

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5 big banks pay $5.4 billion for rigging currencies

Virginia Harrison and Mark Thompson, 20 May 2015

Citigroup (C), Barclays (BCS), JP Morgan Chase (JPM), and Royal Bank of Scotland (RBSPF)were fined more than $2.5 billion by the U.S. after pleading guilty to conspiring to manipulate the price of dollars and euros. The four banks, plus UBS (UBS) , have also been fined $1.6 billion by the Federal Reserve, and Barclays will pay regulators another $1.3 billion to settle related claims.

The first four banks operated what they described as “The Cartel” from as early as 2007, using online chatrooms and coded language to influence the twice-daily setting of benchmarks in an effort to increase their profits. The guilty banks “participated in a brazen display of collusion and foreign exchange rate market manipulation,” said U.S. Attorney General Loretta Lynch. Continue reading “Article: 5 big banks pay $5.4 billion for rigging currencies”

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Article: UBS to Pay Over $500 Million in Fines for Manipulating Currencies and Libor

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UBS to Pay Over $500 Million in Fines for Manipulating Currencies and Libor

Chad Bray, 08 March 2021

The Swiss bank UBS said on Wednesday that it would pay more than $500 million in fines to the authorities in the United States for its role in the manipulation of currency markets and benchmark interest rates.

UBS said it would not face a criminal charge over currency misconduct but would be required to separately plead guilty to a criminal charge for its prior conduct over the manipulation of the interest rates, including the London interbank offered rate, or Libor, after the Justice Department tore up a 2012 nonprosecution agreement. Continue reading “Article: UBS to Pay Over $500 Million in Fines for Manipulating Currencies and Libor”

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Article: Deutsche Bank Fined $2.5 bln for Interest Rate Benchmarks Manipulation

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Deutsche Bank Fined $2.5 bln for Interest Rate Benchmarks Manipulation

Victor Golovtchenko, 23 April 2015

Superintendent of Financial Services Benjamin M. Lawsky, announced today that Deutsche Bank will part with $2.5 billion to settle litigation costs related to manipulation of various interest rate benchmarks.

This is the biggest LIBOR investigations related fine to date, and surpasses Swiss bank’s Credit Suisse record. Besides installing an independent monitor for New York Banking Law violations, the largest German investment bank will also have to terminate and ban certain employees. Continue reading “Article: Deutsche Bank Fined $2.5 bln for Interest Rate Benchmarks Manipulation”

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Article: Deutsche Bank hit by record $2.5bn Libor-rigging fine

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Deutsche Bank hit by record $2.5bn Libor-rigging fine

Jill Treanor, 23 April 2015

Germany’s Deutsche Bank has been fined a record $2.5bn (£1.7bn) for rigging Libor, ordered to fire seven employees and accused of being obstructive towards regulators in their investigations into the global manipulation of the benchmark rate.

The penalties on Germany’s largest bank also involve a guilty plea to the Department of Justice (DoJ) in the US and a deferred prosecution agreement. The regulators released a cache of emails, electronic messages and phone calls showing the attempts to move the rate used to price £3.5tn of financial contracts. Continue reading “Article: Deutsche Bank hit by record $2.5bn Libor-rigging fine”

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Article: Common currency: a forex scandal that epitomises the blindness in the banking crisis

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Common currency: a forex scandal that epitomises the blindness in the banking crisis

Andre Spicer, 16 November 2014

The biggest open secret in the financial world has been confirmed. Regulators in the UK, the US and Switzerland have announced massive fines for some of the world’s largest banks for a manipulation of global currency markets that in its callous ubiquity says so much about the banking behaviours that sparked the global financial crisis.

Fines levied by the UK regulator add up to £1.1 billion. The US regulator announced fines of $1.4 billion. Banks hit by these fines include UBS, Citi, JP Morgan, HSBC and RBS. Barclays is yet to come to a settlement on the back of the investigations.

The probe uncovered individuals traders within large banks who were working together in trading clubs which had names you would expect from the “ruthless narcissists” on BBC TV show, The Apprentice. These included “the players”, “the 3 musketeers” and “1 team, 1 dream”.

These clubs worked together to influence the WM Reuters 4pm fix – essentially the official number used to fix currency rates. It shapes everything from how much we pay for currency when we go overseas to how much our pension fund pays when it wants to buy into an offshore investment. This is one of the core numbers in global finance.

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Article: Regulators fine global banks $4.3 billion in currency investigation

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Regulators fine global banks $4.3 billion in currency investigation

Kirstin Ridley, Joshua Franklin, Aruna Viswanatha, 12 November 2014

Regulators fined six major banks a total of $4.3 billion for failing to stop traders from trying to manipulate the foreign exchange market, following a yearlong global investigation.

HSBC Holdings Plc, Royal Bank of Scotland Group Plc, JPMorgan Chase & Co, Citigroup Inc, UBS AG and Bank of America Corp all faced penalties resulting from the inquiry, which has put the largely unregulated $5-trillion-a-day market on a tighter leash, accelerated the push to automate trading and ensnared the Bank of England.

Authorities accused dealers of sharing confidential information about client orders and coordinating trades to boost their own profits. The foreign exchange benchmark they allegedly manipulated is used by asset managers and corporate treasurers to value their holdings.

Dealers used code names to identify clients without naming them and swapped information in online chatrooms with pseudonyms such as “the players”, “the 3 musketeers” and “1 team, 1 dream.” Those who were not involved were belittled, and traders used obscene language to congratulate themselves on quick profits made from their scams, authorities said.

Wednesday’s fines bring total penalties for benchmark manipulation to more than $10 billion over two years. Britain’s Financial Conduct Authority levied the biggest penalty in the history of the City of London, $1.77 billion, against five of the lenders.

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THE DOLLAR HAS NO INTRINSIC VALUE : DO YOUR ASSETS?