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Financial and Investment Fraud

This archive displays posts tagged as relevant to financial and investment fraud. You may also be interested in the following pages:

Page 56 of 91

October 2, 2019

Brokerage firms BGC Financial LP and GFI Securities LLC will pay $15 million and $10 million, respectively, to the CFTC, and $7.5 million and $5 million, respectively, in penalties under New York's Martin Act based on the admitted practices of their brokers in posting sham bids and offers on foreign exchange options in emerging markets currencies referred to as EFX options.  This so-called "flying" of prices was done to create a false appearance of greater liquidity in the EFX options market. In addition, the brokers engaged in the "printing" of fake trades on EFX options, falsely representing that trades had occurred at particular levels and prices in an effort to induce follow-on trades at the same levels.  In addition to the monetary penalties, the brokerage firms have agreed to additional compliance, monitoring, and oversight.  CFTC;  NY

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Fraud in CFTC-Regulated Markets, Market Manipulation and Trading Violations,

October 2, 2019

Brokerage firm Lek Securities Corp. and its CEO Sam Lek will pay almost $2 million to resolve allegations that they facilitated the manipulative trading scheme of Ukraine-based customer Avalon FA, Ltd.  Lek provided Avalon with the means to engage in "layering" and other cross-market manipulation.  Layering involves placing and canceling orders to signal inaccurate prices.  Avalon also engaged in other practices to buy and sell stocks to artificially impact options prices.  Lek Securities will pay a $1 million penalty plus $526,000 in disgorgement and interest; Sam Lek will pay a $420,000 penalty.  Defendants have admitted the facts alleged and Lek Securities has agreed to retain an independent compliance monitor.  SEC

Tagged in: Financial and Investment Fraud, International Whistleblowers, Market Manipulation and Trading Violations, Securities Fraud,

October 1, 2019

Six financial institutions, each registered or provisionally-registered swap dealers, have been ordered to pay penalties to the CFTC for their failure properly report swap data to a swap data repository as required, and/or for their failure to adequately supervise in connection with swap data reporting.  HSBC Bank USA, N.A. will pay a $650,000 fine;  Société Générale International Limited will pay a $2.5 million fine; The Northern Trust Company will pay a $1 million fine; NatWest Markets Plc will pay  $850,000; The Bank of New York Mellon will pay $750,000, and PNC Bank, National Association will pay $300,000.  CFTC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Fraud in CFTC-Regulated Markets, Regulatory Violations,

October 1, 2019

RBC Capital Markets, LLC, a registered futures commission merchant and subsidiary of the Royal Bank of Canada, will pay $5 million to resolve charges by the CFTC that RBC engaged in improper, fictitious, exchange for physical wash transactions (Wash EFPs), despite an earlier consent order between RBC and the CFTC regarding wash sales and fictitious transactions.  In the present action, the CFTC also found that RBC failed to meet its supervisory obligations, resulting in its failure to detect at least 385 Wash EFPs.  CFTC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Fraud in CFTC-Regulated Markets, Regulatory Violations,

October 1, 2019

Matthew D. Webb of Houston, Texas, and his employer, broker Classic Energy LLC, will pay over $1.5 million to resolve charges that Webb used material, nonpublic information from Classic customers to make trades in Webb's proprietary trading account.  In addition, Webb failed to disclose to Classic customers that he was acting not only as a broker, but also as a trading counterparty.  Classic Energy was also found to have multiple supervision and recordkeeping failures.  CFTC

Tagged in: Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Insider Trading, Regulatory Violations,

October 1, 2019

Three firms will pay a total of $3 million to resolve claims that each violated the Commodity Exchange Act's prohibition on spoofing.  Morgan Stanley Capital Group Inc. will pay $1.5 million for engaging in spoofing the precious metals futures markets; Belvedere Trading LLC will pay $1.1 million for engaging in spoofing in the Chicago Mercantile Exchange E-mini S&P 500 futures market; and, Mitsubishi International Corporation will pay $400,000 for acts of spoofing silver and gold futures on the Commodity Exchange, Inc. markets.  CFTC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Fraud in CFTC-Regulated Markets, Market Manipulation and Trading Violations,

September 30, 2019

Longfin Corporation has been ordered to pay $6.8 million in a default judgment entered in a federal court case alleging that Longfin filed fraudulent papers to qualify for a public offering under Regulation A+, misrepresenting the business as being based in the U.S.  In addition, Longfin reported fictitious revenue from sham commodities transactions and unlawfully distributed Longfin shares, including in unregistered transactions and to insiders and affiliates.  SEC

Tagged in: Cryptocurrency, Financial and Investment Fraud, Misrepresentations, Regulatory Violations, Securities Fraud,

September 30, 2019

Hard Eight Futures, LLC and its principal Igor Chernomzav have been ordered to pay $2.5 million in civil monetary penalties based on findings that the defendants placed bids and offers for E-mini futures contracts with the intent to cancel those orders before execution.  When placed and prior to cancellation, the bids and offers constituted a substantial percentage of the best bid or offer, creating a false impression of buying and selling interest.  CFTC

Tagged in: Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Market Manipulation and Trading Violations,

September 27, 2019

Advisory firms BMO Harris Financial Advisors Inc. and BMO Asset Management Corp. have agreed to pay over $37 million to resolve allegations that the companies violated the Investment Advisers Act by steering customers in their Managed Asset Allocation Program to more expensive investments from which the BMO advisor entities profited without disclosing this practice or the associated conflict of interest.  BMO will pay $29.73 million in disgorgement and prejudgment interest, along with a civil penalty of $8.25 million.  SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Regulatory Violations,

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