The US Department of Justice (DOJ) says it has charged eight individuals over allegations they "spoofed" or manipulated the futures markets for precious metals and share indexes.
In actions brought by the CFTC, which regulates derivatives markets, Deutsche Bank suffered the largest penalty at US$30 million while UBS agreed to pay US$15 million and HSBC was fined US$1.6 million. The Commodity Futures Trading Commission later announced related civil charges against three banks and six individuals. UBS had provided its futures traders, including Mr. Flotron, with automated trading software that allowed them to "place, modify, and cancel multiple orders almost simultaneously", according to a criminal indictment filed in September.
The imminent arrests and charges were reported earlier by Reuters. Thakkar was not immediately available for comment.
A spokesman for HSBC said the bank was pleased to have resolved the matter.
Deutsche Bank said it had provided substantial cooperation "and has enhanced controls and surveillance to help ensure that the underlying conduct does not occur in the future".More news: Xerox reaches deal ceding control to partner Fujifilm
FILE PHOTO: Logos of Deutsche Bank AG are seen in Tokyo July 16, 2014.
"Spoofing is a particularly pernicious example of bad actors seeking to manipulate the market through the abuse of technology", said James McDonald, the CFTC's enforcement director.
The CFTC Complaint alleges that, as part of his manipulative and deceptive scheme, from at least November 25, 2013 to December 17, 2013, Mohan repeatedly engaged in manipulative or deceptive acts or practices by spoofing in accounts owned by his former employer, a proprietary trading firm. The two Fairfield County residents, Edward Bases of New Canaan and John Pacilio of Fairfield, were identified as precious metals traders at unnamed global financial institutions and were charged with spoofing phantom orders in the commodities market in order to profit on what other traders assumed were legitimate orders.
Jitesh Thakkar of IL has been charged with developing a software program used by his co-conspirator to engage in spoofing, the Justice Department said.