Tag: New York

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Article: The US clampdown on firms “spoofing” the markets

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The US clampdown on firms “spoofing” the markets

Simon Wilson, 24 October 2020

A few weeks ago the big US bank JPMorgan Chase admitted that its then-employees fraudulently rigged precious-metals and Treasury (US government bond) markets tens of thousands of times between 2008 and 2016. As part of its settlement with the US authorities, it agreed to pay a total of $920m in fines and restitution (including $172m in “disgorgement”, meaning paying back its ill-gotten gains). The bank admitted that traders based in New York, London and Singapore – working in the gold, silver and other precious metals futures markets, as well as the Treasury cash and futures markets – had engaged in the practice known as “spoofing” on thousands of occasions over the course of eight years.

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Article: Goldman Sachs Charged in Foreign Bribery Case and Agrees to Pay Over $2.9 Billion

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Goldman Sachs Charged in Foreign Bribery Case and Agrees to Pay Over $2.9 Billion

Justice News, 22 October 2020

The Goldman Sachs Group Inc. (Goldman Sachs or the Company), a global financial institution headquartered in New York, New York, and Goldman Sachs (Malaysia) Sdn. Bhd. (GS Malaysia), its Malaysian subsidiary, have admitted to conspiring to violate the Foreign Corrupt Practices Act (FCPA) in connection with a scheme to pay over $1 billion in bribes to Malaysian and Abu Dhabi officials to obtain lucrative business for Goldman Sachs, including its role in underwriting approximately $6.5 billion in three bond deals for 1Malaysia Development Bhd. (1MDB), for which the bank earned hundreds of millions in fees. Goldman Sachs will pay more than $2.9 billion as part of a coordinated resolution with criminal and civil authorities in the United States, the United Kingdom, Singapore, and elsewhere.

Goldman Sachs entered into a deferred prosecution agreement with the department in connection with a criminal information filed today in the Eastern District of New York charging the Company with conspiracy to violate the anti-bribery provisions of the FCPA. GS Malaysia pleaded guilty in the U.S. District Court for the Eastern District of New York to a one-count criminal information charging it with conspiracy to violate the anti-bribery provisions of the FCPA.

Previously, Tim Leissner, the former Southeast Asia Chairman and participating managing director of Goldman Sachs, pleaded guilty to conspiring to launder money and to violate the FCPA. Ng Chong Hwa, also known as “Roger Ng,” former managing director of Goldman and head of investment banking for GS Malaysia, has been charged with conspiring to launder money and to violate the FCPA. Ng was extradited from Malaysia to face these charges and is scheduled to stand trial in March 2021. The cases are assigned to U.S. District Judge Margo K. Brodie of the Eastern District of New York.

In addition to these criminal charges, the department has recovered, or assisted in the recovery of, in excess of $1 billion in assets for Malaysia associated with and traceable to the 1MDB money laundering and bribery scheme.

“Goldman Sachs today accepted responsibility for its role in a conspiracy to bribe high-ranking foreign officials to obtain lucrative underwriting and other business relating to 1MDB,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Today’s resolution, which requires Goldman Sachs to admit wrongdoing and pay nearly three billion dollars in penalties, fines, and disgorgement, holds the bank accountable for this criminal scheme and demonstrates the department’s continuing commitment to combatting corruption and protecting the U.S. financial system.”

“Over a period of five years, Goldman Sachs participated in a sweeping international corruption scheme, conspiring to avail itself of more than $1.6 billion in bribes to multiple high-level government officials across several countries so that the company could reap hundreds of millions of dollars in fees, all to the detriment of the people of Malaysia and the reputation of American financial institutions operating abroad,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York. “Today’s resolution, which includes a criminal guilty plea by Goldman Sachs’ subsidiary in Malaysia, demonstrates that the department will hold accountable any institution that violates U.S. law anywhere in the world by unfairly tilting the scales through corrupt practices.”

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Article: Five Banks Settle LIBOR Manipulation Suit for $22 Million

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Five Banks Settle LIBOR Manipulation Suit for $22 Million

Meg Slachetka, 13 October 2020

Last week, Judge Naomi Buchwald of the Southern District of New York provided final approval of a nearly $22 million settlement between a class of indirect investors and five Wall Street banks that the plaintiff investors accused of manipulating the London Interbank Offered Rate (LIBOR) in violation of the Sherman Act. The plaintiffs are over-the-counter (OTC) investors who indirectly interacted with the defendant banks via interest rate swaps and other transactions.

These plaintiffs made purchases from other banks that are not defendants in the case; the five settling defendants are JPMorgan, Citibank, Bank of America, HSBC, and Barclays. The suit is one of many filed after Barclays admitted in 2012 that it had manipulated LIBOR. Continue reading “Article: Five Banks Settle LIBOR Manipulation Suit for $22 Million”

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Article: JPMorgan Chase Fined US$920 Million For Market Manipulation

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JPMorgan Chase Fined US$920 Million For Market Manipulation

MSHERELYN GOH, 02 October 2020

Just like in an episode of Billions, only Bobby Axelrod would actually have to pay up, JPMorgan Chase has to fork out US$920 million to settle US civil and criminal charges over fake trades in precious metals and Treasury futures designed to manipulate the market,. The settlement comes as the largest bank in the US reached a deferred prosecution agreement with the Justice Department to resolve criminal fraud charges over the long-running schemes.

In one of the schemes, JPMorgan traders in New York, London and Singapore between 2008 and 2016 commissioned tens of thousands of orders for gold, silver, platinum and palladium futures that were placed in order to be cancelled to deceive other market participants, wrote the Department of Justice (DOJ), one of three agencies involved in the case, in a press release. Continue reading “Article: JPMorgan Chase Fined US$920 Million For Market Manipulation”

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Article: JPMorgan pays $920 million to settle spoofing claims

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JPMorgan pays $920 million to settle spoofing claims

Bloomberg News, 29 September 2021

The New York-based lender will pay the biggest monetary penalty ever imposed by the CFTC, including a $436.4 million fine, $311.7 million in restitution and more than $172 million in disgorgement, according to a statement from the Commodity Futures Trading Commission.

The CFTC said its order will recognize and offset restitution and disgorgement payments made to the Department of Justice and Securities and Exchange Commission.

The accord ends a criminal investigation of the bank that has led to a half-dozen employees being charged for allegedly rigging the price of gold and silver futures for more than eight years. Two have entered guilty pleas, and four others are awaiting trial. Continue reading “Article: JPMorgan pays $920 million to settle spoofing claims”

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Article: JPMorgan is set to pay US$1B in record spoofing penalty

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JPMorgan is set to pay US$1B in record spoofing penalty

Ben Bain, Tom Schoenberg and Matt Robinson, 23 September 2020

JPMorgan Chase & Co. is poised to pay close to US$1 billion to resolve market manipulation investigations by U.S. authorities into its trading of metals futures and Treasury securities, according to three people with knowledge of the matter.

The potential record for a settlement involving alleged spoofing could be announced as soon as this week, said the people who asked not to be named because the details haven’t yet been finalized. The accord would end probes by the Justice Department, the Commodity Futures Trading Commission and the Securities and Exchange Commission into whether traders on JPMorgan’s precious metals and treasuries desks rigged markets, two of the people said.

A penalty approaching US$1 billion would far exceed previous spoofing-related fines. It would also be on par with sanctions in many prior manipulation cases, including some brought several years ago against banks for allegedly rigging benchmark interest rates and foreign exchange markets.

Spoofing typically involves flooding derivatives markets with orders that traders don’t intend to execute to trick others into moving prices in a desired direction. The practice has become a focus for prosecutors and regulators in recent years after lawmakers specifically prohibited it in 2010. While submitting and then canceling orders isn’t illegal, it is unlawful as part of a strategy intended to dupe other traders.

It couldn’t be determined whether New York-based JPMorgan will face additional Justice Department penalties in court. Previous spoofing cases have been resolved without banks or trading firms pleading guilty to criminal charges. However, when prosecutors filed cases last year against individual JPMorgan traders they painted a grave picture of its precious metals desk, saying it operated as an illicit enterprise within the bank for almost a decade.

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Article: The Mysterious London Traders Accused of Manipulating Oil Markets — and the Anonymous Hedge Fund, Rare-Coin Expert, and Day Traders Who Are Fighting Back

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The Mysterious London Traders Accused of Manipulating Oil Markets — and the Anonymous Hedge Fund, Rare-Coin Expert, and Day Traders Who Are Fighting Back

Leah McGrath Goodman, 17 September 2020

Robert Mish is not an oil trader. He’s a numismatist — an expert in rare coins, precious metals, and currencies. Growing up in Brooklyn, he began by collecting stamps and playing cards at the age of four. From there, he moved on to coins and, eventually, valuable antiquities, heading out to California to start his own business in Menlo Park, Mish International Monetary. He traveled the world attending coin shows and became an authority on commodities such as gold, silver, platinum, and palladium, writing and contributing to a number of books.

This year, two months after his 73rd birthday, Mish found himself trading U.S. crude oil futures at perhaps their most inopportune moment: On April 20, the price of oil fell to zero — and kept falling. Mish, an expert in commodities, was holding ten oil contracts as the market went over the edge.

After 50 years of inspecting currencies and stores of value from the Americas to Europe to Asia, Mish can also claim another expertise: He is an expert in counterfeit detection. That day, as he watched his oil trades go south, he picked up the phone and called one of the best market-manipulation lawyers in the country.

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Article: Burford abandons market manipulation claim

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Burford abandons market manipulation claim

Gazette reporter, 15 May 2020

Burford Capital has abandoned a legal bid to prove its share price was illegally manipulated after being denied access to market information.

The embattled litigation funder said it does not intend to appeal a High Court ruling refusing an application to compel the London Stock Exchange to release trading data.

Burford has made a concerted effort to pursue claims for market manipulation following an August 2019 short attack against its shares. The Guernsey-registered and New York-based business came under assault when a US shareholder activist, Muddy Waters, published an apparently damning analysis. Muddy Waters claimed Burford was ‘arguably insolvent’ and described its governance as ‘laughter-inducing’, allegations which were strenuously denied by Burford. Muddy Waters renewed its attack on Burford earlier this week, accusing it of over-stating profits. Continue reading “Article: Burford abandons market manipulation claim”

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Article: Pandemic May Disrupt Discovery In Credit Suisse Forex Case

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Pandemic May Disrupt Discovery In Credit Suisse Forex Case

Dean Seal, 17 April 2020

Counsel for investors and Credit Suisse cited the COVID-19 pandemic Monday when they asked a New York federal judge to push their discovery deadlines in a suit over alleged foreign exchange market manipulation by nine weeks.

In a letter to U.S. District Judge Lorna G. Schofield, attorneys for both sides in the long-running litigation said that in light of the threat to public health posed by the novel coronavirus, as well as the disruptions it has caused in air travel, continued discovery efforts would be risky and exceedingly difficult. Continue reading “Article: Pandemic May Disrupt Discovery In Credit Suisse Forex Case”

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Article: US charges another former JP Morgan exec with market manipulation

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US charges another former JP Morgan exec with market manipulation

Reuters . New York, 17 November 2019

The Department of Justice has charged another former JPMorgan Chase and Co executive with alleged racketeering and manipulating precious metals prices between 2008 and 2016, the latest in a string of similar prosecutions.

The indictment against Jeffrey Ruffo, who is also charged with other federal crimes including conspiracy to commit wire fraud, is the result of an ‘ongoing investigation’, federal prosecutors said in a statement. Ruffo is the sixth person to be charged with alleged fraud in connection to JPMorgan’s precious metals desk.

The case relates to spoofing, which involves placing bids to buy or offers to sell contracts with the intent to cancel them before execution, allowing spoofers to influence prices. In recent years there has a been a surge in spoofing related prosecutions in the United States by the Department of Justice and the Commodity Futures Trading Commission.

Ruffo could not immediately be reached for comment.

A JPMorgan spokesman did not immediately respond to a request for a comment. The US bank has said in recent regulatory filings that it is cooperating with various investigations relating to its metals trading practices.

According to the indictment, Ruffo worked at JPMorgan from 2008 to 2017 as a salesperson serving hedge funds investing in precious metals and he encouraged JPMorgan traders to place deceptive orders to create price advantages for his clients.

The indictment also alleged that Ruffo and his former colleagues defrauded JPMorgan’s clients who had invested in ‘barrier options’ by pushing option prices to levels that benefited the bank.

An option is a financial instrument that gives buyers the right to buy or sell an underlying asset at an agreed price and at a fixed time. Its value is tied to the value of the asset.

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Article: London forex trader sues Citigroup over ‘malicious’ forex prosecution

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London forex trader sues Citigroup over ‘malicious’ forex prosecution

Kirstin Ridley, 02 October 2019

Rohan Ramchandani, the former European head of Citigroup’s forex spot market trading desk, alleges in a lawsuit filed on Wednesday that Citigroup made false and “gravely derogatory” assertions against him to government investigators and the media after firing him in 2014 without cause.

“Ultimately, Citi quite literally fabricated an antitrust case for the United States Department of Justice against Ramchandani based upon knowingly false allegations that he engaged in market ‘manipulation’ and ‘collusion’,” read the complaint filed in the federal court in Manhattan.

A spokeswoman for Citigroup in London said the bank rejected the allegations and would fight the case.

“Mr. Ramchandani’s claims of malicious prosecution are without merit and we will contest them vigorously,” she said.

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Article: Testimony Concerning The Involvement of Organized Crime on Wall Street

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Testimony Concerning The Involvement of Organized Crime on Wall Street

Richard H. Walker, 13 September 2019

The government has charged affiliates of organized crime families with securities law violations in several recent cases. While any unlawful activity by organized crime on Wall Street is cause for concern, the Commission believes such activity to be limited and not a threat to the overall integrity of our nation’s securities markets. The Commission’s experience shows that the activities of organized crime have been confined to the “microcap” securities market1 and taint only a small fraction of that sector. Moreover, through joint prosecutions with various United States Attorney’s Offices and state and local prosecutors, as well as the adoption of regulatory initiatives designed to safeguard the microcap market, the Commission has made significant strides in curtailing organized crime activity on Wall Street. Continue reading “Article: Testimony Concerning The Involvement of Organized Crime on Wall Street”

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Article: Court Dismisses Some FX Rigging Claims Against Credit Suisse

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Court Dismisses Some FX Rigging Claims Against Credit Suisse

Aziz Abdel-Qader, 04 September 2019

A New York judge overseeing litigation accusing 16 banks of rigging prices in the foreign exchange market on Wednesday narrowed, but refused to dismiss antitrust lawsuits against Credit Suisse Group AG.

A group of investors has sued the global banks back in May for allegedly rigging prices for their own benefit by sharing confidential orders and trading positions. Continue reading “Article: Court Dismisses Some FX Rigging Claims Against Credit Suisse”

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Article: ECB’s Draghi brushes off Trump charge of currency manipulation

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ECB’s Draghi brushes off Trump charge of currency manipulation

News Desk, 19 June 2019

June 19: European Central Bank chief Mario Draghi said Tuesday that the institution “doesn’t target the exchange rate”, shrugging off an allegation of currency manipulation from US President Donald Trump.

“We have our remit. We have our mandate. Our mandate is price stability” or inflation just below two percent, Draghi told a central banking conference in Sintra, Portugal.

“We are ready to use all the instruments that are necessary to fulfil this mandate, and we don’t target the exchange rate,” he added.

Draghi’s statement that weak economic growth and sluggish inflation could prompt the ECB to slash further rates already at historic lows had earlier sparked Trump’s ire.

“Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA,” Trump said on Twitter.

“They have been getting away with this for years, along with China and others,” he added.

Draghi said in a speech that “further cuts in policy interest rates… remain part of our tools” as the bank looks to juice growth and inflation.

Eurozone policymakers had already discussed potential rate cuts in early June, but Draghi’s latest remarks were the first to catch markets’ full attention.

That was in part because he said the central bank was ready to move “in the absence of improvement” rather than if economic conditions worsen, lowering the threshold for action.

But Trump later in the day continued to imply that the ECB was somehow looking to gain an advantage, rather than responding to economic conditions in the euro area.

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Article: Goldman Sachs hit with £5.2m fine for short selling

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Goldman Sachs hit with £5.2m fine for short selling

James Booth, 28 November 2018

South Korea’s financial regulator has hit Goldman Sachs with a 7.5bn won (£5.2m) fine for breaking rules on short-selling.

The fine is for short-selling without securing underlying assets, the Financial Services Commission (FSC) said in a statement. Continue reading “Article: Goldman Sachs hit with £5.2m fine for short selling”

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