Three major banks, Deutsche Bank, UBS and HSBC have agreed to pay $46.6 million to settle allegations of schemes to manipulate precious metals futures market trading, the Commodity Futures Trading Commission said. Also eight people charged have been charged with federal crimes, the Department of Justice announced. Charges included conspiracy, wire fraud, commodities fraud, commodities fraud and spoofing offenses. German banking giant Deutsche Bank AG and its Deutsche Bank Securities will pay a $30 million civil penalty and undertake remedial action, the CFTC said. Some Deutsche Bank traders allegedly “engaged in a scheme to manipulate the price of precious metals futures contracts by utilizing a variety of manual spoofing techniques” and by trading in a manner to trigger customer stop-loss orders.
Spoofing means placing buy or sell offers for futures contracts with the plan to cancel the transactions before they are executed. This can influence market prices by creating a false illusion of demand. Stop-loss orders are placed with a broker to sell a security when it reaches a certain price. Swiss banking giant UBS will pay a $15 million civil penalty and take remedial action for the actions of certain precious metals traders who tried to manipulate the price of precious metals futures contracts by using spoofing techniques, the CFTC said. London-headquartered global bank HSBC will pay a $1.6 million civil penalty and take action to desist from violating anti-spoofing regulations.
Jeffrey Newman represents whistleblowers.