Washington D.C. – The Commodity Futures Trading Commission (CFTC) announced today a series of enforcement actions against three major banks – Deutsche Bank, UBS, and HSBC – and six individuals, alleging commodities fraud and manipulative trading practices known as spoofing. The actions were coordinated with the Department of Justice and the Federal Bureau of Investigation.
The CFTC alleges that between 2008 and 2014, Deutsche Bank AG and its subsidiary, Deutsche Bank Securities Inc., engaged in a scheme to manipulate the price of precious metals futures contracts traded on the Commodity Exchange, Inc. (COMEX). The bank allegedly used manual spoofing techniques and traded to deliberately trigger customer stop-loss orders, impacting the market price of precious metals like gold and silver. As a result of the settlement, Deutsche Bank will pay a $30 million civil monetary penalty and undertake remedial measures.
UBS AG also faces charges from the CFTC for similar manipulative practices. From January 2008 through December 2013, the bank’s precious metals traders allegedly utilized spoofing techniques on COMEX, aiming to manipulate gold and silver futures contracts and trigger stop-loss orders. UBS will pay a $15 million penalty and implement remedial relief as part of its settlement.
HSBC Securities (USA) Inc. is also implicated in the scheme, accused of numerous acts of spoofing in gold and other precious metals futures traded on COMEX. Details regarding the specific penalties for HSBC were not immediately available in the released statement.
CFTC’s Division of Enforcement Director, James McDonald, emphasized the agency’s commitment to combating spoofing, stating that it represents a “pernicious” form of market manipulation enabled by technology. He highlighted the CFTC’s focus on holding both companies and individuals accountable for such misconduct, including those who develop the tools or teach others how to engage in spoofing. The agency aims to deter future misconduct through these enforcement actions.
The investigation remains ongoing, with the Department of Justice and FBI continuing to pursue criminal charges related to the alleged schemes. Full details of the settlements and charging documents are available on the CFTC’s website, atcftc.gov.
Source: CFTC.gov
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