Archive

May 24, 2022

Switzerland-based mining and commodity trading firm Glencore International A.G. and an affiliate have agreed to pay over $1.1 billion in criminal penalties and forfeitures, and will plead guilty to violations of the Foreign Corrupt Practices Act and conspiracy to engage in commodity price manipulation.  In addition, the companies will pay over $1.186 billion in civil penalties and disgorgement in settlement with the CFTC.  As part of the criminal plea agreement, Glencore admitted that between 2007 and 2018, it corruptly provided more than $100 million in payments and other things of value to intermediaries for the payment of bribes to officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of the Congo.  With respect to the commodity price manipulation scheme, the CFTC found that from as early as 2007 through at least 2018, Glencore sought to increase profits from its physical and derivatives oil products trading by manipulating or attempting to manipulate four U.S. based S&P Global Platts physical oil benchmarks and related futures and swaps.  Criminal fines and forfeitures total over $700 million for the FCPA violations and nearly $486 million for the for the market manipulation violations, which amounts are subject to credits for amounts paid to the CFTC and foreign authorities including the United Kingdom.  The $1.186 billion CFTC resolution will also be reduced, with Glencore receiving credit for payments in the criminal resolutions.  DOJ; USAO SDNY; CFTC

May 19, 2022

Sohrab “Sam” Sharma, Robert Farkas, and Raymond Trapani will disgorge over $40 million for raising more than $32 million from investors in their unregistered ICO of “CTR tokens” through their controlled entity, Centra Tech Inc. The fraudsters made material misrepresentations in their marketing of the tokens, including claiming partnerships with Visa, MasterCard, and The Bancorp; created fake executive bios; misrepresented the company’s viability; and manipulated trading in the tokens to generate interest. The three defendants have been sentenced to imprisonment in addition to the financial penalties levied. SEC

May 13, 2022

Kraft Foods Group, Inc. and Mondelez Global LLC have been ordered to pay $16 million after being found to manipulate the prices of cash wheat and wheat futures, and holding wheat futures positions in excess of speculative position limits established by the CFTC.  The companies allegedly engaged in the scheme in order to lower cash wheat prices after they rose in the summer of 2011.  The misconduct earned the two companies over $5.4 million in profits.  CFTC

December 21, 2021

Financial services firm NatWest Markets Plc has pleaded guilty to charges related to its manipulation of the market for U.S. Treasury futures contracts and for the purchase and sale of U.S. Treasury securities in the secondary (cash) market.  NatWest will pay approximately $35 million in criminal fines, restitution, and forfeiture.  The government charged that NatWest traders engaged in spoofing by placing orders with the intent to cancel those orders before execution in order to artificially push up or down the prevailing market price.  DOJ; USAO CT

October 21, 2021

The CFTC has issued a final award of nearly $200 million to a whistleblower whose information significantly contributed to government investigations resulting in successful enforcement actions by the CFTC, another U.S. federal regulator, and a foreign regulator.  In making the award, the CFTC noted that the information provided by the whistleblower was specific and credible, leading to important, direct evidence of wrongdoing, as well as voluntarily provided and timely, even though the CFTC already had an open investigation at the time of the whistleblower’s report.  The CFTC had first issued a preliminary order denying the individual’s application; the whistleblower requested reconsideration and provided information about how his information was utilized, including in the parallel investigations.  CFTC

August 17, 2021

Investment advisor Murchinson Ltd., together with associated individuals Marc Bistricer and Paul Zogala, will pay restitution, interest, and penalties totaling nearly $9 million to resolve allegations that they caused a hedge fund client to violate Regulation SHO regarding uncovered short sales and other problematic trading practices.  Respondents allegedly provided erroneous order-marking information, thereby causing the hedge fund brokers to mismark the hedge funds’ sales as “long,” and resulting in their failure to borrow or locate shares prior to executing the sales.  SEC

January 8, 2021

Deutsche Bank Aktiengesellschaft entered into a deferred prosecution agreement and agreed to pay over $130 million to resolve charges that the financial services company violated the FCPA and engaged in a commodities fraud scheme.  The SEC charged that Deutsche Bank made payments to individuals including foreign officials, their relatives, and their associates as third-party intermediaries and consultants to obtain and retain global business, and lacked sufficient internal accounting controls related to the use and payment of such intermediaries, resulting in millions in bribe payments or payments for unknown, undocumented, or unauthorized services that were inaccurately recorded as legitimate business expenses with documentation falsified by Deutsche Bank employees. The agreed payment represents a $79.6 million criminal penalty and $43.3 million in disgorgement in prejudgment interest to the SEC.   Separately, in connection with a spoofing scheme undertaken by Deutsche precious metals traders in New York, Singapore, and London the bank agreed to a total of $7.5 million in criminal penalties, disgorgement, and restitution, the penalty amount of which will be credited against a 2018 $30 million CFTC civil penalty for substantially the same conduct.   SEC; DOJ

September 30, 2020

Marcus Schulz will pay over $1 million – a $670,000 penalty and $427,000 in disgorgement – to resolve CFTC allegations that, while employed as an energy trader, he passed on confidential information to an outside broker, including information about his employers block trade orders.  The broker would then arrange to take the other side of the order at prices that allowed the broker and others involved in the scheme to make a profit on offsetting trades, which profits they shared with Schulz.  CFTC

July 20, 2020

UBS Financial Services Inc. and two of its registered representatives will pay $10 million in penalties, disgorgement, and interest to resolve claims that UBS improperly redirected municipal bond offerings away from retail customers and to “flippers,” who re-sold the bonds to other broker-dealers, including UBS.  This practice allowed UBS to circumvent the priority retail order periods set by bond issuers and improperly obtain a greater allocation of bonds for its own inventory.  SEC

June 18, 2020

Deutsche Bank AG has agreed to pay over $10 million to settle two enforcement matters with the CFTC.  The first matter, settled for $1.25 million, involved numerous instances of spoofing by two Tokyo-based traders of Deutsche Bank Securities Inc. in 2013.  The second matter involved a swap reporting platform outage in 2016 that prevented Deutsche Bank from reporting swap data for five full days, exacerbated existing reporting problems, and ultimately caused new reporting problems, including some that violated a 2015 CFTC order.  To settle that matter, Deutsche Bank will pay $9 million, as well as undergo compliance monitoring.  CFTC