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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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Constantine Cannon Client Receives Maximum Award for Blowing the Whistle on ITG

Posted  05/21/21
silver whistle with Securities Exchange Commission logo
The SEC has made a multi-million-dollar award to a Constantine Cannon client whose original information and assistance led to an enforcement action against the brokerage firm ITG.  The award—30% of the recovery—is the maximum allowed under the SEC Whistleblower Program. The SEC has taken three enforcement actions against ITG in recent years, two of which involve ITG’s dark pool POSIT.  POSIT is an alternate...

How will regulators respond to Bitcoin’s price fluctuations?

Posted  05/18/21
By Sarah “Poppy” Alexander
Bitcoins stacked with stocks rising
The price of Bitcoin—never stable—has become even more erratic in the last month.  From April 17 to May 17, the price fell 26%.  Such a huge drop would be noteworthy in a stock investment.  But in something claiming to be a currency, that kind of instability is normally only seen in times of crisis and hyperinflation.  Coming just as cryptocurrencies are making a play to be considered mainstream, this latest...

Top Ten SEC and CFTC Recoveries of 2020

Posted  01/15/21
top ten list
Despite its many shortcomings, 2020 did bring great news for whistleblowers: record-breaking growth in the CFTC and SEC Whistleblower Programs, as well as massive enforcement actions by both agencies.  In this post, we will detail the Top Ten SEC and CFTC recoveries of 2020 in cases other than FCPA enforcement.  As detailed below, the SEC netted billions of dollars in penalties and restitution from companies accused...

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

JPMorgan Chase Pays nearly $1 Billion in Fines for Market Manipulation of Precious Metals and U.S. Treasuries

Posted  10/16/20
investors on computers for market trading
JPMorgan Chase & Co. agreed to pay over $955 million to settle civil and criminal charges over a scheme involving fake trades in precious metals and U.S. treasuries designed to manipulate the market in an effort to enhance the bank’s profits and cut losses. The multi-agency enforcement action was brought by the Commodity Futures Trading Commission (CFTC), the Department of Justice (DOJ) and the Securities and...

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

CFTC Sets Sights on Binary Options Fraud

Posted  09/17/20
By Sarah “Poppy” Alexander
commodity futures trading commission logo
The CFTC continues its hot streak, aggressively pursuing fraudsters and rewarding whistleblowers who come forward with valuable information.  One particular enforcement trend stands out: a number of high-profile settlements related to illegal binary options trading platforms. Binary options are the OTB of the stock market—a method of gambling whether particular stocks will go up or down without actually...

Catch of the Week: Bank of Nova Scotia Fined for Commodities Fraud and False Statements to Investigators

Posted  08/21/20
building of a bank
Self-disclosure offers wrong-doing corporations a path to leniency: Fess up, the government says, and we’ll go easier on you.  But as the Bank of Nova Scotia learned, you had better reveal the full extent of the problem, or you are just making your problem worse. The Bank had made a self-disclosure that secured it's leniency and an $800,000 deal for charges of commodities fraud.  When the CFTC later determined...

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
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