The US Justice Department and the country's derivatives regulator said on Monday they had filed civil and criminal charges against three European banks, which paid $46.6 million to settle the cases, and eight individuals for alleged manipulation in US futures and commodities market.
UBS, Deutsche Bank and HSBC and former traders at the banks, as well as individuals at other firms, were charged following a large-scale multi-agency probe including the Commodity Futures Trading Commission (CFTC) into "spoofing" in metals and equities futures.
The case marks the first time the Justice Department and the CFTC had worked together, along with the Federal Bureau of Investigation, to bring both criminal and civil charges against multiple companies and individuals, and underlined the authorities' increasing focus on holding individuals accountable for corporate wrongdoing.
Spoofing, which is a criminal offence under the 2010 Dodd-Frank financial reform law, involves placing bids to buy or offers to sell futures contracts with the intent to cancel them before execution. By creating an illusion of demand, spoofers can influence prices to benefit their market positions.
Deutsche Bank and UBS have agreed to pay $30 million and $15 million respectively to settle the civil charges in the case, while HSBC will pay $1.6 million, the CFTC said.
All three banks received reduced penalties from the CFTC for providing significant assistance in the investigations, which relate to activity that dates back as far as 2008. UBS self-reported the alleged misconduct by its traders to the regulator, the CFTC said. The imminent arrests and charges were reported earlier by Reuters.
The settlement is the most high-profile brought so far by the CFTC's head of enforcement James McDonald who was appointed to the role in March 2017.
McDonald, who was previously a prosecutor in the Southern District of New York, said in September he plans to encourage companies and staff to report their own wrongdoing and cooperate with investigators, a strategy he hopes will make it easier to prosecute more individuals.
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