The Gateway to Algorithmic and Automated Trading

The not so fantastic Three

First Published 31st January 2018

Yet again, some of the usual suspects have been charged for spoofing precious materials

Six traders who have either worked for or are currently working for UBS, HSBC and Deutsche Bank will be charged under a cross-agency crackdown between Commodity Futures Trading Commission (CFTC), Department of Justice (DOJ) and FBI who are on the hunt to punish spoofers of futures.

The banks and traders charged were engaging the spoofing of precious materials such as gold and silver. This behaviour will cost Deutsche Bank 30 million USD, UBS 15 million USD, and HSBC will only have to pay a civil monetary penalty of 1.6 million USD.

Starting at least in February 2008 and continuing up until at least September 2014, traders at Deutsche Bank were engaging in a "scheme to manipulate the price of precious metals futures contracts by utilizing a variety of manual spoofing techniques with respect to precious metals futures contracts traded on Commodity Exchange, Incl. COMEX and by trading in a manner to trigger customer stop-loss orders." In addition to that, the Order found that UBS had started spoofing from January 2008 and continued doing so until December 2013.

This is the fourth time HSBC has been found guilty of manipulating markets after the bank almost lost its charter.