HSBC Settles With US Department Of Justice

U.S. CFTC to fine UBS, Deutsche Bank, HSBC for spoofing, manipulation: sources

This is the best tl;dr I could make, original reduced by 51%. (I'm a bot)
WASHINGTON - The U.S. derivatives regulator is set to announce it has fined European lenders UBS, HSBC and Deutsche Bank millions of dollars each for so-called "Spoofing" and manipulation in the U.S. futures market, three people with direct knowledge of the matter told Reuters.
The enforcement action by the Commodity Futures Trading Commission is the result of a multi-agency investigation that also involves the Department of Justice and the Federal Bureau of Investigation - the first of its kind for the CFTC, the people said.
The fines for UBS and Deutsche Bank will be upward of ten million, while the fine for HSBC will be slightly less than that, the people said, without providing exact figures.
Spoofing involves placing bids to buy or offers to sell futures contracts with the intent to cancel them before execution.
Some of the manipulative behavior came to light as a result of the authorities' previously-settled probes into forex market manipulation while UBS self-reported the wrong doing, according to two of the people with knowledge of the matter.
The bank investigations have been ongoing for more than a year, one of the people said.
Summary Source | FAQ | Feedback | Top keywords: people#1 futures#2 Spoofing#3 UBS#4 Bank#5
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Financial Times: Trader transcripts: 'If you ain’t cheating, you ain’t trying' -

Financial Times: Trader transcripts: 'If you ain’t cheating, you ain’t trying'
May 20, 2015
They were known as the “Cartel” or the “Mafia” among their peers. The unsubtle nicknames were given to a group of traders who at one time worked for five of the six banks that reached settlements on Wednesday with regulators over allegations they rigged the foreign exchange markets.
Transcripts from chatrooms used by those traders and others as they attempted to manipulate forex benchmarks and engaged in misleading sales practices towards their clients were published as part of the settlements.
Below is a selection of the exchanges (including original punctuation) from the settlements between Barclays and the New York State Department of Financial Services and the UK’s Financial Conduct Authority:
● Membership of the chatroom used by the “Cartel” was by invitation only. The FT has previously named the members of the “Cartel” as Rohan Ramchandani, Citi’s European head of spot trading, and Richard Usher, who moved from RBS to become JPMorgan’s chief currency dealer in London, and Matt Gardiner, who was at Barclays before joining UBS.
One Barclays trader, Chris Ashton, was desperate to join the chatroom when he became the bank’s main euro trader in 2011. After discussions as to whether the trader “would add value”, he was invited to join for a one-month “trial” but was warned by Mr Ramchandani: “Mess this up and sleep with one eye open at night.” Mr Ashton passed his “trial” and remained in the chatroom until it was shut down at some point in 2012.
● Traders used various strategies to try to manipulate fix rates, according to the NYDFS.
One method, known as “building ammo”, involved one trader building a large position in a currency and then unloading it just before or during the “fixing period” — a short period of time during which an average price is produced, at which large client transactions are executed — in an attempt to move the price favourably.
On January 6 2012, the head of Barclays’ FX spot desk in London attempted to manipulate the reference rate set by the European Central Bank by unloading €500m at the time of the fix. He wrote in the Cartel chatroom “I saved 500 for last second” and in another, “i had 500 to jam it.”
Another method was for traders at rival banks to agree to stay out of each other’s way at the time of the fix.
In one example, from June 2011, a Barclays trader told a counterpart at HSBC that another trader was building orders to execute at the fix contrary to HSBC’s orders. But the Barclays trader assisted HSBC by executing trades ahead of the fix to decrease the other trader’s orders. He wrote: “He paid me for 186 . . . so shioud have giot rid of main buyer for u.”
In another chat in December 2011, a Barclays trader told another at Citigroup: “If u bigger. He will step out of the way . . . We gonna help u.”
In the another example, traders in the US dollar-Brazilian real market colluded to manipulate it by agreeing to boycott local brokers to drive down competition. In October 2009, a trader at Royal Bank of Canada wrote: “everybody is in agreement in not accepting a local player as a broker?” A Barclays forex trader replied: “yes, the less competition the better.”
● Then there were numerous occasions, according to the NYDFS, from at least 2008 to 2014 when Barclays employees on the forex sales team engaged in misleading sales practices with clients by applying “hard mark-ups” to the prices that traders gave the sales team.
The level of mark-up was determined by calculating the best rate for Barclays that would not lead the client to question whether executing the transaction with the bank was a good idea.
One Barclays forex salesperson wrote in a chat to an employee at another bank in December 2009: “hard mark up is key . . . but i was taught early . . . u dont have clients . . . u dont make money . . . so dont be stupid.”
These mark-ups were a key source of revenue to Barclays, and generating them was made a high priority for sales managers. As a Barclays’ vice-president in New York (who later became co-head of UK FX hedge fund sales) wrote in a November 2010 chat: “markup is making sure you make the right decision on price . . . which is whats the worst price i can put on this where the customers decision to trade with me or give me future business doesn’t change . . . if you aint cheating, you aint trying.”
● In the FCA settlement, the regulator details an exchange between traders at Barclays and three other firms, refered to as X, Y and Z. Barclays was trying to trigger a client stop-loss order to buy £77m at a rate of 95 against another currency. If it could trigger the order, it would result in Barclays selling £77m to its client and the bank would profit it the average rate at which the bank had bought sterling in the market was below the rate at which the client had agreed to buy it.
In one exchange, firm X asked Barclays and firms Y and Z if they had any stop-loss orders — “u got...stops?” Barclays replied to say it had one for “80 quid” at a level of 95 and noted it was “primed like a coiled cobra...concentrating so hard...[as if] made of wax...[haven’t] even blinked”.
● While most of the settlements concerned manipulation of foreign exchange benchmarks, UBS inked a deal with the US Department of Justice in which it agreed to plead guilty to rigging Libor.
In once example, a broker commented to a UBS trader after a Yen Libor fix on June 10 2009: “mate yur getting bloody good at this libor game . . . think of me when yur on yur yacht in monaco wont yu”
In another conversation with a UBS trader after a Libor Yen fix on August 22 2008, a broker, identified as A1, commented about another broker, A2: “think [broker-A2] is your best broker in terms of value added :-)”.
The trader replied: “yeah . . . i reckon i owe him a lot more”, to which broker-A1 responded: “he’s ok with an annual champagne shipment, a few [drinking sessions] with [his supervisor] and a small bonus every now and then.”
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Financial Times: Trader transcripts: 'If you ain’t cheating, you ain’t trying' -

Financial Times: Trader transcripts: 'If you ain’t cheating, you ain’t trying'
May 20, 2015
They were known as the “Cartel” or the “Mafia” among their peers. The unsubtle nicknames were given to a group of traders who at one time worked for five of the six banks that reached settlements on Wednesday with regulators over allegations they rigged the foreign exchange markets.
Transcripts from chatrooms used by those traders and others as they attempted to manipulate forex benchmarks and engaged in misleading sales practices towards their clients were published as part of the settlements.
Below is a selection of the exchanges (including original punctuation) from the settlements between Barclays and the New York State Department of Financial Services and the UK’s Financial Conduct Authority:
● Membership of the chatroom used by the “Cartel” was by invitation only. The FT has previously named the members of the “Cartel” as Rohan Ramchandani, Citi’s European head of spot trading, and Richard Usher, who moved from RBS to become JPMorgan’s chief currency dealer in London, and Matt Gardiner, who was at Barclays before joining UBS.
One Barclays trader, Chris Ashton, was desperate to join the chatroom when he became the bank’s main euro trader in 2011. After discussions as to whether the trader “would add value”, he was invited to join for a one-month “trial” but was warned by Mr Ramchandani: “Mess this up and sleep with one eye open at night.” Mr Ashton passed his “trial” and remained in the chatroom until it was shut down at some point in 2012.
● Traders used various strategies to try to manipulate fix rates, according to the NYDFS.
One method, known as “building ammo”, involved one trader building a large position in a currency and then unloading it just before or during the “fixing period” — a short period of time during which an average price is produced, at which large client transactions are executed — in an attempt to move the price favourably.
On January 6 2012, the head of Barclays’ FX spot desk in London attempted to manipulate the reference rate set by the European Central Bank by unloading €500m at the time of the fix. He wrote in the Cartel chatroom “I saved 500 for last second” and in another, “i had 500 to jam it.”
Another method was for traders at rival banks to agree to stay out of each other’s way at the time of the fix.
In one example, from June 2011, a Barclays trader told a counterpart at HSBC that another trader was building orders to execute at the fix contrary to HSBC’s orders. But the Barclays trader assisted HSBC by executing trades ahead of the fix to decrease the other trader’s orders. He wrote: “He paid me for 186 . . . so shioud have giot rid of main buyer for u.”
In another chat in December 2011, a Barclays trader told another at Citigroup: “If u bigger. He will step out of the way . . . We gonna help u.”
In the another example, traders in the US dollar-Brazilian real market colluded to manipulate it by agreeing to boycott local brokers to drive down competition. In October 2009, a trader at Royal Bank of Canada wrote: “everybody is in agreement in not accepting a local player as a broker?” A Barclays forex trader replied: “yes, the less competition the better.”
● Then there were numerous occasions, according to the NYDFS, from at least 2008 to 2014 when Barclays employees on the forex sales team engaged in misleading sales practices with clients by applying “hard mark-ups” to the prices that traders gave the sales team.
The level of mark-up was determined by calculating the best rate for Barclays that would not lead the client to question whether executing the transaction with the bank was a good idea.
One Barclays forex salesperson wrote in a chat to an employee at another bank in December 2009: “hard mark up is key . . . but i was taught early . . . u dont have clients . . . u dont make money . . . so dont be stupid.”
These mark-ups were a key source of revenue to Barclays, and generating them was made a high priority for sales managers. As a Barclays’ vice-president in New York (who later became co-head of UK FX hedge fund sales) wrote in a November 2010 chat: “markup is making sure you make the right decision on price . . . which is whats the worst price i can put on this where the customers decision to trade with me or give me future business doesn’t change . . . if you aint cheating, you aint trying.”
● In the FCA settlement, the regulator details an exchange between traders at Barclays and three other firms, refered to as X, Y and Z. Barclays was trying to trigger a client stop-loss order to buy £77m at a rate of 95 against another currency. If it could trigger the order, it would result in Barclays selling £77m to its client and the bank would profit it the average rate at which the bank had bought sterling in the market was below the rate at which the client had agreed to buy it.
In one exchange, firm X asked Barclays and firms Y and Z if they had any stop-loss orders — “u got...stops?” Barclays replied to say it had one for “80 quid” at a level of 95 and noted it was “primed like a coiled cobra...concentrating so hard...[as if] made of wax...[haven’t] even blinked”.
● While most of the settlements concerned manipulation of foreign exchange benchmarks, UBS inked a deal with the US Department of Justice in which it agreed to plead guilty to rigging Libor.
In once example, a broker commented to a UBS trader after a Yen Libor fix on June 10 2009: “mate yur getting bloody good at this libor game . . . think of me when yur on yur yacht in monaco wont yu”
In another conversation with a UBS trader after a Libor Yen fix on August 22 2008, a broker, identified as A1, commented about another broker, A2: “think [broker-A2] is your best broker in terms of value added :-)”.
The trader replied: “yeah . . . i reckon i owe him a lot more”, to which broker-A1 responded: “he’s ok with an annual champagne shipment, a few [drinking sessions] with [his supervisor] and a small bonus every now and then.”
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Prosecutor: HSBC knows we're watching HSBC whistleblower Everett Stern and Occupy Alt Banking 8/29/2013 Eric Holder Looked The Other Way On Narco-Laundering HSBC Bank HSBC Aids 9/11 Assailants, Gets Out of Jail Free HSBC Exec Resigns After Report Linking Bank to Drug Cartel Laundering Interview: Jeffrey Robinson on HSBC fine for money-laundering DOJ gets unprecedented guilty plea by five banks for rigging currency markets

The Justice Department is investigating allegations that an employee of HSBC leaked confidential client information to a major hedge fund. HSBC was founded in Hong Kong in 1865 and is now the seventh largest bank in the world. It has some 38 million customers and its assets exceed $2.3 trillion and is headquartered in London. Just by way of comparison, the assets that the bank holds are comparable to the GDP of the UK. HSBC has settled claims by the US Department of Justice stemming from the sale of its mortgage-backed securities ... In what has been a long and tumultuous investigation and corresponding prosecution, HSBC has finally reached settlement with the US Department of Justice, over allegations of foreign exchange rigging conducted by two former employees of the bank. The bank will be required to pay $101.5 million, allocated as a $63.1 million criminal penalty and $38.4 million as restitution to the affected ... The Justice Department said HSBC received no leniency for voluntarily disclosing the matter, adding that initially the bank's cooperation with investigators was also "deficient in certain respects ... The former head of HSBC’s Global Foreign Exchange Cash-Trading will be spending time in the slammer. The US Department of Justice announced that Mark Johnson, a former forex trader for the European bank, has been sentenced to twenty-four months in prison. “Mark Johnson, 51, a United Kingdom citizen, was sentenced to serve 24 months in prison by U.S. Distict Judge Nicholas Garaufis of the ... The head of global foreign exchange cash trading at HSBC Bank plc, a subsidiary of HSBC Holdings plc (collectively HSBC), and HSBC’s former head of foreign exchange cash trading for Europe, the Middle East and Africa were charged with conspiring to defraud a client of HSBC through a scheme commonly referred to as “front running.” Assistant Attorney General Leslie R. Caldwell of the ... The United States Department of Justice (DOJ) has stepped in the deposition-taking process in a Forex benchmark rate fixing case targeting some of the leading banks. On Friday, December 8, 2017, the DOJ submitted a Letter to Judge Lorna G Schofield of the New York Southern District Court, asking her for a discovery stay extension. The document, seen by FinanceFeeds, stipulates a request for a ... HSBC has been fined $101.5 million for front running client orders, the US Department of Justice (DOJ) announced today. The bank has entered into a deferred prosecution agreement (DPA) and agreed to pay a $63.1 million criminal penalty and $38.4 million in disgorgement and restitution to resolve charges that it engaged in a scheme to defraud two bank clients through a multi-million dollar ... The United States Department of Justice (DOJ) seeks to intervene again in a Forex benchmark rate fixing case, just several months after it secured a stay in the discovery process in the case which targets some of the world’s major banks including JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC), and HSBC. ... HSBC Holdings plc has entered into a three-year deferred prosecution agreement with the US Department of Justice (DoJ) to resolve the DoJ’s investigation into HSBC’s historical foreign exchange sales and trading activities within its Global Markets business. Under the agreement, HSBC will pay a total of US$101.5m, including a US$63.1m fine and US$38.4m in restitution. The payment reflects ...

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Prosecutor: HSBC knows we're watching

Al Jazeera's Kimberly Halkett asks Jeffrey Robinson, an expert on money-laundering and the author of Laundrymen, about the US Department of Justice's move to impose a fine on HSBC instead of ... Today, the Departments of Justice and Treasury announced a settlement with HSBC. The bank agreed to pay almost $2 billion in fines and penalties. It was charged with violating sanctions laws by ... Assistant U.S. Attorney General Lanny Breuer says the money-laundering settlement with HSBC will keep the bank from breaking the rules again. Despite mountains of evidence, the Department of Justice gave HSBC execs deferred prosecution. A relatively small fine levied against HSBC for violating the Trading with the Enemy Act and Bank ... The Justice Department has confirmed it is investigating HSBC for criminal wrongdoing. Also speaking on Tuesday, Michigan Democratic Senator Carl Levin noted that the alleged improprieties at HSBC ... Five major banking institutions pleaded guilty to rigging currencies and manipulating the foreign exchange market in a case brought by the Department of Justice and other authorities. The banks ... "U.S. Justice Department officials overruled their prosecutors’ recommendation to pursue criminal charges against HSBC Holdings PLC over money-laundering failings, according to a House committee ...

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