Binance Faces Probe by U.S. Money-Laundering and Tax Sleuths
Tom Schoenberg, 13 May 2021
Binance Holdings Ltd. is under investigation by the Justice Department and Internal Revenue Service, ensnaring the world’s biggest cryptocurrency exchange in U.S. efforts to root out illicit activity that’s thrived in the red-hot but mostly unregulated market.
As part of the inquiry, officials who probe money laundering and tax offenses have sought information from individuals with insight into Binance’s business, according to people with knowledge of the matter who asked not to be named because the probe is confidential. Led by Changpeng Zhao, a charismatic tech executive who relishes promoting tokens on Twitter and in media interviews, Binance has leap-frogged rivals since he co-founded it in 2017. Continue reading “Article: Binance Faces Probe by U.S. Money-Laundering and Tax Sleuths”
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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Bank of America Eroded U.S. Spoof Case, Laying Path for JPMorgan
Bloomberg, 20 February 2020
Bank of America Corp.’s lawyers came through big for their client last year when they whittled down a U.S. case over precious metals spoofing.
Justice Department prosecutors wanted to bring criminal charges, but bank lawyers asked for none and prevailed. Prosecutors named Bank of America throughout the draft settlement document but not in the final version.
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JPMorgan’s Metals Desk Was a Criminal Enterprise, U.S. Says
By Tom Schoenberg and David Voreacos
The head of the bank’s global precious metals desk, Michael Nowak, 45, and two others ripped off market participants and even clients as they illegally moved prices for gold, silver, platinum and palladium, the Justice Department said Monday. Nowak was placed on leave last month, a person familiar with the matter has said. The other traders charged were Gregg Smith, 55 and Christopher Jordan, 47.