Compliance
Trio Of Global Banks To Pay $46 Million In DoJ "Spoofing" Charges Settlement

The US Department of Justice is continuing to crack down on market malpractice, fining three banking behemoths a total of $46 million over allegations they manipulated two futures markets.
The US Department of Justice (DoJ) has charged eight individuals
from three banking giants over allegations they manipulated the
futures markets for precious metals and share indexes, through a
process known as “spoofing”.
UBS, the world’s largest wealth manager, HSBC and Deutsche Bank
will pay a combined total of $46.6 million to settle the charges
against them. Seven of the individuals charged are traders and
one is a technology consultant.
Spoofing refers to traders submitting, then cancelling, orders on
futures contracts to manipulate the quoted price.
In this instance, the traders are alleged to have placed hundreds
of bogus orders that they never intended to fulfil. By creating a
mirage for extra demand they altered prices and the behaviour of
other market players through moves they could then exploit for
their own gain.
The DoJ's acting ssistant attorney general, John Cronan, said the
alleged conduct "reflects a disturbing and reckless trend of
individuals and companies seeking to put illicit gains and
profits above honest and law abiding conduct".
He said the result was that the spoofers were "harming innocent
investors and putting the very integrity of our financial markets
at risk”.
Deutsche Bank, Germany’s largest lender, will pay $30 million.
UBS agreed to a $15 million settlement and HSBC was fined $1.6
million.