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Market Manipulation and Trading Violations

This archive displays posts tagged as relevant to market manipulation and trading violations, including front running, spoofing, straw purchases, naked short selling, and pump-and-dump schemes. You may also be interested in the following pages:

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Catch of the Week — Yukom Communications and Others Face CFTC Claims of Binary Options Fraud

Posted  08/16/19
computerized trading
The Commodity Futures Trading Commission filed suit against five entities and four individuals on August 12, 2019, in the Northern District of Illinois for running a $103 million fraudulent binary options scheme. The defendants, led by Israeli company Yukom Communications Ltd.,which marketed binary options using two websites known as BinaryBook and BigOption. In recent years, the CFTC has targeted fraudulent binary...

August 15, 2019

Kraft Foods Group and Mondalēz Global LLC have been ordered to pay a $16 million penalty for allegedly manipulating the wheat market in the summer of 2011.  Defendants’ orders for wheat futures contracts worth $90 million resulted in false demand signals, and accomplished the actual goal of defendants, which was to narrow the price spread on wheat futures, and lower cash wheat prices.  Defendants were able to earn more than $5 million in profits.  CFTC

July 18, 2019

Swapnil Rege, who worked as a portfolio manager for a hedge fund that operated as a commodity pool operator, was been ordered by the CFTC  and SEC to pay a $100,000 civil penalty and disgorge a $600,000 performance bonus he received as a result of his fraudulent mismarking the valuations of interest rate swaps.  The mismarking, accomplished through various means, artifically inflated the profitability of his trades, earning him a larger performance bonus.  SEC, CFTC

Catch of the Week — Merrill Lynch Commodities Inc.

Posted  06/28/19
MerrillLynchLogoOfBull
Merrill Lynch Commodities Inc (“Merrill”), a commodity trading subsidiary of Bank of America Corporation, agreed on June 25th to two $25 million settlements with both the Department of Justice (“DOJ”) and the Commodity Futures Trading Commission (“CFTC”) to resolve allegations it conducted deceptive trading practices in United States commodities markets.

DOJ Criminal Violations

This settlement resolved...

June 25, 2019

Merrill Lynch Commodities, Inc. (MLCI) has agreed to pay $25 million for spoofing and manipulating the precious metals market on the Commodity Exchange from 2008 to 2014.  In the non-prosecution agreement signed with DOJ, MLCI admitted that its employees had placed thousands of fraudulent orders to create a false sense of demand and induce other market participants to make purchases or sales.  CFTC, DOJ

The Latest on Cryptocurrency, Offshore Tax Avoidance and Money-Laundering, and Whistleblowing: A Report from OffshoreAlert Miami 2019

Posted  05/3/19
Hanging Hundred Dollar Bills on Clothes Line
“A diverse collection of the hunters and the hunted.” That’s how the Wall Street Journal described the OffshoreAlert Conference in 2009. The 2019 conference was no different, bringing together those who work in the offshore industry, the government enforcers who try to stop the unscrupulous among them, and the asset recovery professionals who pursue lost funds. Alongside them were whistleblowers and their...

February 15, 2019

Following his conviction at trial for securities fraud and related charges, attorney James M. Schneider of Boca Raton, Florida, was sentenced to seven years in prison and ordered to pay restitution of $19.7 million to over 2,000 investors.  From 2008 to 2013, Schneider and his co-conspirators created approximately 20 shell companies, falsely representing their ownership and control in SEC filings before offering their securities for sale.  The conspirators would then use the shell company shares in pump-and-dump and other manipulation schemes.  USAO SD FL

January 28, 2019

Jiongsheng (“Jim”) Zhao, of Sydney, Australia, a commodities trader at an Australian proprietary trading firm (Trading Firm A), pleaded guilty to spoofing in connection with his fraudulent and deceptive trading activity in the E-mini S&P 500 futures contracts market on the Chicago Mercantile Exchange (CME). Zhao admitted that from approximately July 2012 through March 2016, he placed thousands of orders for E-mini S&P 500 futures contracts on the CME that he intended to cancel before execution to artificially move the price of E-mini S&P 500 futures contracts in a direction that was favorable to Zhao to the detriment of other market participants. Trading Firm A kept a percentage of Zhao’s trading profits, ranging at various times from 20 percent to 50 percent. DOJ
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