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HFT High Finance Trading Predators


The foreign exchange market, gold & silver, derivatives,
interest rates, energy prices, and the list goes on and on and on. 

Currency Markets Are Rigged by Washingtons Blog - November 13th, 2014
Currency markets are Every Market is massively rigged. And see this and this.

Big Banks Busted Massively Manipulating Foreign Exchange, Precious Metals … And Every Other Market

A Genuine "Robber Baron" Class

2016 HSBC Bank Executives Face Charges in $3.5 Billion Currency Case 
The criminal charges against the individuals follows a broader investigation of banks into alleged manipulation of foreign currency trading that federal prosecutors began in 2013. The case against the two men resembles a conventional insider trading scheme, but with a twist because the defendants traded in currencies instead of stocks. The global head of HSBC’s foreign exchange cash trading desk, Mark Johnson, a Briton, was arrested by federal agents Tuesday night at Kennedy International Airport as he was boarding a flight to London.  He and Stuart Scott, the former head of the bank’s currency trading desk for Europe, the Middle East and Africa, were charged with conspiracy to commit wire fraud related to a transaction on behalf of a corporate client, exchanging dollars for British pounds.

2016 Five banks sued in U.S. for rigging $9 trillion agency bond market

Five major banks and four traders were sued on Wednesday in a private U.S. lawsuit claiming they conspired to rig prices worldwide in a more than $9 trillion market for bonds issued by government-linked organizations and agencies.  Bank of America Corp (BAC.N), Credit Agricole SA (CAGR.PA), Credit Suisse Group AG (CSGN.S), Deutsche Bank AG (DBKGn.DE) and Nomura Holdings Inc (8604.T) were accused of secretly agreeing to widen the "bid-ask" spreads they quoted customers of supranational, sub-sovereign and agency (SSA) bonds.  The lawsuit filed in Manhattan federal court by the Boston Retirement System said the collusion dates to at least 2005, was conducted through chatrooms and instant messaging, and caused investors to overpay for bonds they bought or accept low prices for bonds they sold.  "Only through collusion could a dealer quote a wider spread than market conditions otherwise dictate without losing market share and profits," the complaint said. "Defendants reaped millions of dollar(s) in profits at the expense of plaintiff and members of the class as result of their misconduct."  The proposed class-action lawsuit seeks triple damages, and follows probes by U.S. and European Union antitrust regulators into possible SSA bond price rigging.



‘Too Big to Fail’ Banks Thriving a Few Years After Financial Crisis

Big American banks, however, will continue to rule the roost in investment banking, free of material competition in any business that requires capital, and, for the time being, without any meaningful change in leadership at the top.Nearly eight years after the onset of the financial crisis, its unintended consequences continue to startle and amaze.  For instance, who would have thought that many of the big European banks – among them Barclays, Credit Suisse, Deutsche Bank and UBS – would have new chief executives, two of whom are American, and be more or less in retreat from the global investment banking business? Who would have thought that the big banks would pay nearly $200 billion in fines and other considerations to various branches of federal and state governments and that not a single top Wall Street executive would be held responsible for perpetrating the wrongdoing represented by those huge fines?
No wonder the chief executives of JPMorgan Chase, Goldman Sachs, Morgan Stanley and Bank of America are in no hurry to give up their posts, much to the frustration of their direct reports. It’s another surprising consequence of the worst financial crisis since the Great Depression: Wall Street chiefs who stick around.

If Wall Street doesn’t take steps to prevent some of the behavior that has led to $230 billion in fines against American and European banks in the last six years, principal regulators might do it for them and I've got a bridge to sell you  .....


Rigged markets, stealing, and corrupt regulators w/ Eric Hunsader of @NanexLLC



Seven of the world's biggest banks have agreed to pay $324 million to settle a private U.S. lawsuit accusing them of rigging an interest rate benchmark used in the $553 trillion derivatives market.  

The settlement made public on Tuesday, which requires court approval, resolves antitrust claims against Bank of America Corp, Barclays Plc, Citigroup Inc, Credit Suisse Group AG, Deutsche Bank AG, JPMorgan Chase & Co and Royal Bank of Scotland Group Plc.  Several pension funds and municipalities accused 14 banks, including those that settled, of conspiring to rig the "ISDAfix" benchmark for their own gain from at least 2009 to 2012.  Companies and investors use ISDAfix to price swaps transactions, commercial real estate mortgages and structured debt securities.  The alleged illegal activity included the execution of rapid trades just before the rate was set each day, called "banging the close," causing the British brokerage ICAP Plc to delay trades until they moved ISDAfix where they wanted, and posting rates that did not reflect market activity.  
Under the settlement, payments would include $52 million from JPMorgan; $50 million each from Bank of America, Credit Suisse, Deutsche Bank and RBS; $42 million from Citigroup and $30 million from Barclays.  The remaining defendants are BNP Paribas SA, Goldman Sachs Group Inc, HSBC Holdings Plc, Morgan Stanley, Nomura Holdings Inc, UBS AG , Wells Fargo & Co and ICAP, lawyers for the plaintiffs said.
Tuesday's accord came five weeks after U.S. District Judge Jesse Furman in Manhattan refused to dismiss the lawsuit.  U.S. and European regulators have also examined whether ISDAfix was set properly, and Barclays agreed last May to pay a $115 million fine to settle a U.S. Commodity Futures Trading Commission probe.  The private lawsuit is one of many pending in Manhattan federal court accusing banks of conspiring to rig rate benchmarks, securities prices or commodities prices.


Bank of America (BoA) recently released a stunning and straightforward report, which explains how the Federal Reserve. Bank and other central banks around the world have rigged the equities markets. In the United States, a corrupt Congress is also to blame, since it unconstitutionally gave the Fed the task of not only controlling the nation’s money supply but also ensuring sufficient employment and maintaining balance in the stock, bond, and commodities markets. According to Benjamin Fowler, chief of BoA’s global equity derivatives research, in a December 9, 2015 report entitled “Fragility is the new volatility,” the years since the 2008 international financial collapse have seen unprecedented central bank interventions in the market—a monstrous manipulation of such proportions that the banksters have, in fact, “broken the market.” In plain English, the central bankers have created money out of thin air to provide too-easy credit and even secretly bought up stocks, bonds and commodities in order to prop up an otherwise collapsing market. The market is a fraud, because real profits do not exist in too many companies, especially the largest.  The illusion of prosperity is created in this case by the central banks’ continuing injection of credit and purchases of equities. This money artificially inflates prices and balance sheets.

Goldman Sachs Top Lawyer Is Part of a Secret Banking Cabal as CEO Blankfein Denies One Exists

The top Federal regulator of the Wall Street bank holding companies, the Federal Reserve, has also fueled the perception of banking cartels by allowing the New York Fed to sponsor its own bank groups like the Foreign Exchange Committee, which has been operating for the past 38 years and whose members, JPMorgan Chase and Citigroup, each pleaded guilty on May 20, 2015 to a felony count brought by the U.S. Justice Department for – wait for it – engaging in rigging foreign exchange markets. The New York Fed-sponsored group, among other things, writes best practices rules for Wall Street.

The New York Fed also bizarrely sponsors the Financial Markets Lawyers Group. Itsweb site is an extension of the New York Fed’s web site. Members of the group are from the same Wall Street banks whose General Counsels are meeting secretly in posh hotels once a year.


2016 Lloyds under investigation by FCA over possible market rigging

AND Lloyd's says it won't be so 'of London' once Brexit begins

[ENGLAND] Following a series of fines across the industry for rigging interest rates and foreign exchange markets, the Financial Conduct Authority has been asking Lloyds for information about trading in gilts.  The FCA is seeking information about whether Lloyds traders may have tried to bolster profits by driving down the prices of gilts during official auctions or inflated their price when selling them to investors, the Wall Street Journal reported.  The bonds were issued by sovereigns, and agency borrowers such as German-backed development bank KfW, and supranationals like the European Investment Bank. The government continues to own nearly 10% of Lloyds following its bailout in 2008, when £20bn of taxpayers’ money was used to buy shares. The initial shareholding was 43% and the government is aiming to sell off its remaining shares in the coming months, partly through an offer to retail investors.  The FCA, which has recently been accused of going soft on the City after dropping an review into banking culture, WON'T INVESTIGATE HSBC.

Four traders of sovereign, supranational and agency debt are being investigated by the US Department of Justice for possible manipulation of bond prices. The DoJ is investigating allegations that SSA traders at different banks agreed prices and shared information on certain US dollar bonds in chatrooms they established for the purpose. The bonds were issued by sovereigns, and agency borrowers such as German-backed development bank KfW, and supranationals like the European Investment Bank.  One source who trades SSA bonds said that the use of permanent Bloomberg chatrooms within market sectors was commonplace in the City but after a series of major scandals investment banks stopped the practice. He added that the group created a new chatroom each day to discuss activity and prices.  The US DoJ is looking into whether any of the discussions in those chatrooms amounted to manipulation of market prices, said the sources.

The Volcker Rule went into effect 8/17/15 bans speculative trading for banks.
The pertinent clause of Dodd-Frank amounts to all of 165 words (with the key points covered in 40). Banks are banned from two activities: proprietary trading and ties (through investment and relationships) to hedge and private-equity funds. Every time a bank buys or sells a security it is in effect taking part in a proprietary trade. This is also true, for example, when it expands its holdings of foreign currency in anticipation of demand. Bank examiners will not only have to judge assets and liabilities, but also intentions. The seven largest market-making banks have collectively spent over $400 million in the last year alone in order to become compliant though the total cost of the new rules are ultimately unquantifiable. The aim of the rule is to stop banks (and their worldwide affiliates) with the implicit support of the American government from indulging in speculation and becoming enmeshed in conflicts of interest. In reality, distinguishing such activities from more beneficial financial operations has proved daunting. “It’s impossible for banks to know if they are completely in compliance with the rule, because there are so many interpretive questions remaining,” says Gabriel Rosenberg of Davis Polk & Wardwell, a law firm. Volcker Rule Lets Bank CEOs ‘Off the Hook’ Banks are finding their way around the Volcker Rule in some unexpected ways. JPMorgan’s recent windfall off the Swiss franc—and Citi’s loss—is testament to that fact.  JPMorgan is also finding its way around the Volcker Rule.

JPMorgan to pay most in $1.86 billion swaps price-fixing settlement: Bloomberg
JPMorgan Chase & Co is set to pay almost a third of a $1.86 billion settlement to resolve claims that a dozen big banks conspired to limit competition in the credit-default swaps market, Bloomberg reported.


Six City brokers have gone on trial, accused of rigging a lending rate used between banks. The Libor rate is used to carry out trillions of pounds worth of financial deals. All six men, who have pleaded not guilty, are accused of conspiracy to defraud by trying to move the rate linked to the Japanese yen.

12/17/16  6 former UBS employees banned by Swiss regulator after currency probe

The UBS traders are among 11 ex-employees Finma said it was investigating in November 2014, when it ordered UBS to give up 134 million Swiss francs ($134.6 million) in profits, after it “severely violated” proper conduct in currency markets. Switzerland’s financial regulator banned six former UBS Group AG employees from working in the industry for as long as five years, making them the first individuals punished in the global currency-rigging scandal. The former managers and traders were “directly responsible for serious breaches of regulation at UBS,” Finma said in a statement Thursday, without disclosing any names. Proceedings against four other UBS currency traders were dropped in August after they were given "reprimands," and one other case is continuing, the regulator said. "Those responsible for the management of foreign exchange trading tolerated, and at times encouraged, behavior which was improper and against the interests of clients," the Swiss regulator said. "Although managers were aware that traders were able to use chat groups to share information and knew of the risks associated with this behavior, they failed to implement adequate systems and controls and to consistently monitor compliance."

9/2015 Swiss authorities will probe the fixing of metal prices

The Swiss Competition Commission (Comco) said it will investigate seven banks including HSBC and UBS. Comco said it had "indications" that the banks had "possibly concluded illegal competition defying deals". US authorities have already sued several banks for metal price fixing. Comco said its investigation will include Barclays, Deutsche Bank, Morgan Stanley, Mitsui, and Swiss bank Julius Baer, over what it said were "possible price fixing deals, especially in connection with spreads". A "spread" is the difference between the bidding price and actual price of a commodity or other asset. Trading in gold, silver, platinum and palladium is where the Swiss regulator is focusing its attention. HSBC is already involved in a case of metal price-fixing in New York, where it is amongst several companies which were accused of having conspired since 2007 to rig the twice-daily platinum and palladium fixings.

2014 Nanex ~ 15-Jul-2014 ~ Perfect Pilfering  A detailed exposé on how the market is rigged from a data-centric approach

Why people think the market is rigged  
On July 29, 2014, Representative Scott Garrett (R-NJ), Chair of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, held an equity market structure round-table at the Library of Congress in Washington, D.C.  
The 3rd panel discussion about the SIP (Securities Information Processor) was stunning.  The SIP, commonly known as the consolidated data feed, is what most investors see when they look at a quote or stock prices when deciding whether to make an investment. In fact, 2.5 million subscribers pay about $500 million a year to exchanges for the SIP data. Imagine our shock when the very people that some have charged with rigging the market, make the claim that no one uses the SIP, and they can't find any benefit to using the SIP. These are the people running the stock market! We built the matrix from exchange filings with the SEC. Unbeknownst to the panelists, this information was filed with the SEC practically at the same time they were perjuring themselves. How is that for karma? 

This is not the only reason people believe the market is unfair. Here are two others that we have painstakenly documented:

"Business culture in the banking industry is favoring, or at least tolerating, fraudulent or unethical behaviors." ~Ernst Fehr

The prospectus of Fehr's study was published in Nature.
According to Reuters, "Fehr's team conducted a laboratory game with bankers, then repeated it with other types of workers as comparisons. Participants were asked to toss a coin 10 times, unobserved, and report the results. For each toss they knew whether heads or tail would yield a $20 reward. They were told they could keep their winnings if they were more than or equal to those of a randomly selected subject from a pilot study. The results showed the control group reported 51.6% winning tosses and the treatment group – whose banking identity had been emphasized to them – reported 58.2% as wins, giving a misrepresentation rate of 16%. The proportion of subjects cheating was 26%. The same experiments with employees in other sectors – including manufacturing, telecoms and pharmaceuticals – showed they don't become more dishonest when their professional identity or banking-related information is emphasized."

With that as background, here's another news flash:

The U.S. Senate Permanent Subcommittee on Investigations is finishing up a two-day hearing today on whether banks like J.P. Morgan Chase & Co. JPM, and MS should be restricted from owning or trading physical commodities such as oil and metals. While the hearings weren't prompted by the University of Zürich's research, it feels like they could have been.

The Senate subcommittee has been investigating whether banks' participation in markets, where they also control infrastructure assets, influence prices and harm consumers. Some lawmakers argue such activity – particularly banks' ownership of power plants, shipping containers, and metals warehouses – creates the potential for anti-competitive behavior. Others looking at the same facts and figures extrapolate out their findings a step further. I'll speak for them, because I am one of them.

It's About the Option to Manipulate

Banks don't own all these hard-asset facilities just because they are profitable businesses to own and run. Banks own them to manipulate prices and markets, which is infinitely more profitable than just owning storage and transportation facilities. Sen. Carl Levin (D-MI), chairman of the subcommittee, spent three hours accusing two witnesses from Goldman Sachs of manipulating aluminum markets. He then asked J.P. Morgan Chase and Morgan Stanley why they had tried to hide their supposed "investments" in metals and natural gas from regulators.

Levin's rhetorical quote of the day was this:

"If you liked what Wall Street did for the housing market, you'll love what they're doing for commodities."

A good part of the hearings yesterday focused on activity at a Goldman aluminum-warehousing subsidiary, Metro International Trade Services LLC.

The Wall Street Journal today reported this from the hearings: "A pair of Goldman Sachs executives said their actions didn't affect those prices (aluminum) and they were acting on orders from clients. In a series of testy exchanges with Messrs. Levin and Senator John McCain, the executives acknowledged the warehouse firm introduced a new transaction structure after Goldman bought it in 2010, causing metal transfers between warehouses that created a logjam and drove up wait times for customers to withdraw aluminum. Metro International's chief executive, Chris Wibbelman, said another part of Goldman, its commodity-trading arm, ordered withdrawals of 300,000 tons of aluminum from the warehouses and further extended wait times in 2012."

No, there's no manipulation there.

We don't need international research studies to tell us banks are greedy, manipulative liars and cheats. We live it 24/7 and have ample proof they aren't just robber barons.

They are something much worse.

They are an institutionalized, protected criminal class who run the United States – and too many other supposedly free nations – for their personal benefit.

If we aren't jailing these criminals, ask yourself, "Why not?"


2/24/15 Banks face scrutiny over pricing of precious metals: WSJ
The U.S. Department of Justice (DoJ) and the Commodity Futures Trading Commission are investigating at least 10 major banks for possible rigging of precious-metals markets, the Wall Street Journal reported, citing people close to the inquiries. HSBC was one of several banks named in lawsuits filed in U.S. courts last year alleging a conspiracy to manipulate gold, silver, platinum and palladium prices, as well as precious metals derivatives, during the daily precious metals fixes. The century-old gold fix is a standard price for the metal that banks set twice a day over the phone. Some gold traders claim they were harmed by a scheme to manipulate the fix. The banks operating the precious metals benchmarks, known as the fixes, said last year they would no longer administer that process. An electronic daily silver price benchmark is now administered by Thomson Reuters and CME Group, while the London Metal Exchange provides twice-daily benchmark platinum and palladium prices. ICE Benchmark Administration will run an electronic gold price benchmark from March 20 to replace the London gold fix.



Regulators fine global banks $4.3 billion in currency investigation

Regulators fined six major banks including Citigroup (C.N) and UBS (UBSN.VX) a total of $4.3 billion for failing to stop traders from trying to manipulate the foreign exchange market, following a year-long global investigation.

HSBC (HSBA.L), Royal Bank of Scotland (RBS.L), JP Morgan (JPM.N) and Bank of America (BAC.N) also face penalties resulting from the inquiry that has put the largely unregulated $5 trillion-a-day market on a tighter leash, accelerated the push to automate trading and ensnared the Bank of England.

In the latest scandal to hit the financial services industry, dealers shared confidential information about client orders and coordinated trades to make money from a foreign exchange benchmark used by asset managers and corporate treasurers to value their holdings. Dozens of traders have been fired or suspended.

The U.S. Office of the Comptroller of the Currency, which regulates banksalso fined the U.S. lenders $950 million and was the only authority to penalise Bank of America. Fines against Bank of America, N.A.; Citibank, N.A.; and JPMorgan Chase Bank, N.A., follow multiagency examinations and investigations of the banks’ activities in the global FX market, which has an average daily volume of more than $5 trillion dollars.




7/6/15 Brazil's Antitrust Watchdog Probes 15 Banks Over Forex Cartel

Brazil's antitrust enforcer said Thursday said it is investigating Barclays PLC, JPMorgan Chase & Co. and 13 more of the world's top banks plus 30 individuals for participating in an alleged cartel that manipulated foreign exchange rates.  The general superintendence of the Administrative Council for Economic Defense, known as CADE, said it has opened an administrative proceeding to determine whether the banks manipulated exchange rates involving the Brazilian real and foreign currency from 2007 until 2013.  CADE will also investigate the manipulation of reference indexes, such as those of the Brazilian Central Bank, WM/Reuters and the European Central Bank, according to a statement issued by the agency.  In addition to Barclays and JPMorgan, the banks targeted by CADE's probe are Standard Bank PLC, Tokyo-Mitsubishi UFJ Bank, Citigroup Inc., Credit Suisse AG, Deutsche Bank AG, HSBC Holdings PLC, Merrill Lynch, Morgan Stanley, Nomura Holdings Inc., Royal Bank of Canada, Royal Bank of Scotland Group PLC, Standard Chartered Bank and UBS AG, as well as 30 individuals.  "The opinion of the superintendent points out that there are strong indications of anti-competitive practices to fix prices and commercial conditions among competing financial institutions," CADE's statement said.  The alleged anti-competitive conduct — which involved the foreign exchange market and financial institutions that operated in this market — was made possible through the use of online chat rooms that were sometimes named by the parties as "The Cartel" or "The Mafia," according to CADE.  The general superintendence said that, according to the evidence, the parties colluded to fix exchange spreads and coordinated on the purchase and sale of currencies and price proposals to clients. They also allegedly hindered the activity of other operators in the exchange market involving the Brazilian currency.  Evidence also pointed to potentially improper sharing of commercially sensitive information about the exchange market, such as information regarding negotiations, contracts and future prices, clients orders strategies and objectives of negotiations, among other things, according to CADE.   "All the alleged conduct would have damaged competition in this market, hurting the conditions and prices paid by the clients in their foreign exchange operations, raising the profit of the parties and distorting the reference indexes of the foreign exchange market," CADE's statement said.  The investigation by CADE was launched after an unnamed participant in the cartel reached an agreement under the leniency program to report the conduct and cooperate with the investigation in exchange for either immunity or a reduced penalty, according to the watchdog.   With the opening of the administrative proceeding, the defendants will be notified to present their defense within 30 days. At the end of the investigation phase, the general superintendence will publish an opinion and will submit the case to CADE's tribunal, which will be responsible for the final decision.  Representatives for JPMorgan Chase, HSBC and Deutsche Bank declined comment. Among the other banks targeted by CADE, representatives for Barclays and Morgan Stanley were not immediately available for comment.  CADE's investigation comes just over a month after five banks — Barclays, Citigroup, JP Morgan, RBS and UBS — agreed to pay more than $5.6 billion to settle U.S. and U.K. claims that they manipulated the global foreign exchange markets.  Four of the banks, excluding UBS, also pleaded guilty to criminal antitrust violations over traders' colluding to rig benchmark forex rates.  Following the settlement, investors in late June launched a putative class action in New York federal court against certain of the banks over their alleged roles in the foreign exchange market manipulation scheme.

Britain’s Financial Conduct Authority (FCA) fined five lenders $1.77 billion, the biggest penalty in the history of the City of London, and the U.S. Commodity Futures Trading Commission (CFTC) ordered them to pay a further $1.48 billion.

1/21/15 Bank of England Forex Report Treasury Committee questions Bank official Martin Mallett in a 2011 phone call to Mr Mallett, in which a trader raised concerns about foreign exchange transactions. At one point in the discussion, Mr Mallett said: “Well, that’s market manipulation isn’t it?” and the trader replied: “Yep, absolutely.” Jesse Norman, a Conservative MP on the committee, repeatedly asked on Wednesday why this wasn’t interpreted as evidence that Mr Mallett knew about currency rigging!


Gold and Silver Are Manipulated

Switzerland’s financial regulator (FINMA) found “serious misconduct” and a “clear attempt to manipulate precious metals benchmarks” by UBS employees in precious metals trading, particularly with silver.

Reuters Forex Settlement Gold reports:

Swiss regulator FINMA said on Wednesday that it found a "clear attempt" to manipulate precious metals benchmarks during its investigation into precious metals and foreign exchange trading at UBS …

Gold and silver prices have been "fixed" in daily conference calls by the powers that be.

Bloomberg reported last December: It is the participating banks themselves that administer the gold and silver benchmarks.


So are prices being manipulated? Let’s take a look at the evidence.

In his The Gold Cartel book “The Gold Cartel,” commodity analyst Dimitri Speck combines minute-by-minute data from most of 1993 through 2012 to show how gold prices move on an average day (see attached charts). He finds that the spot price of gold tends to drop sharply around the London FIX evening fixing (10 a.m. New York time). A similar, if less pronounced, drop in price occurs around the London morning fixing. The same daily declines can be seen in silver prices from 1998 through 2012.

For both commodities there were, on average, no comparable price changes at any other time of the day. These patterns are consistent with manipulation in both markets.


Derivatives Are Manipulated

Runaway derivatives – especially credit default swaps (CDS) – were one of the main causes of the 2008 financial crisis. Congress never fixed the problem, and actually made it worse.

The big banks have long manipulated derivatives … a $1,200 Trillion Dollar market.

Indeed, many trillions of dollars of derivatives are being manipulated in the exact same same way that interest rates are fixed (see below) … through gamed self-reporting.

Reuters noted in September: A Manhattan federal judge said on Thursday that investors may pursue a lawsuit accusing 12 major banks of violating antitrust law by fixing prices and restraining competition in the roughly $21 trillion market for credit default swaps.


“The complaint provides a chronology of behavior that would probably not result from chance, coincidence, independent responses to common stimuli, or mere interdependence,” [Judge] Cote said.

The defendants include Bank of America Corp, Barclays Plc, BNP Paribas SA, Citigroup Inc , Credit Suisse Group AG, Deutsche Bank AG , Goldman Sachs Group Inc, HSBC Holdings Plc , JPMorgan Chase & Co, Morgan Stanley, Royal Bank of Scotland Group Plc and UBS AG.

Other defendants are the International Swaps and Derivatives Association and Market Ltd, which provides credit derivative pricing services.


U.S. and European regulators have probed potential anti competitive activity in CDS. In July 2013, the European Commission accused many of the defendants of colluding to block new CDS exchanges from entering the market.


"The financial crisis hardly explains the alleged secret meetings and coordinated actions," the judge wrote. “Nor does it explain why ISDA and Markit simultaneously reversed course.”

In other words, the big banks are continuing to fix prices for CDS in secret meetings … and have torpedoed the more open and transparent CDS exchanges that Congress mandated.


Interest Rates Are Manipulated

Bloomberg Libor Probe reported in January:

Royal Bank of Scotland Group Plc was ordered to pay $50 million by a federal judge in Connecticut over claims that it rigged the London interbank offered rate.

RBS Securities Japan Ltd. in April pleaded guilty to wire fraud as part of a settlement of more than $600 million with U.S and U.K. regulators over Libor manipulation, according to court filings. U.S. District Judge Michael P. Shea in New Haven today sentenced the Tokyo-based unit of RBS, Britain’s biggest publicly owned lender, to pay the agreed-upon fine, according to a Justice Department.

Global investigations into banks’ attempts to manipulate the benchmarks for profit have led to fines and settlements for lenders including RBS, Barclays Plc, UBS AG and Rabobank Groep.

RBS was among six companies fined a record 1.7 billion euros ($2.3 billion) by the European Union last month for rigging interest rates linked to Libor. The combined fines for manipulating yen Libor and Euribor, the benchmark money-market rate for the euro, are the largest-ever EU cartel penalties.

Global fines for rate-rigging have reached $6 billion since June 2012 as authorities around the world probe whether traders worked together to fix Libor, meant to reflect the interest rate at which banks lend to each other, to benefit their own trading positions.

To put the Libor interest rate scandal in perspective:

  • Even though RBS and a handful of other banks have been fined for interest rate manipulation, Libor is still being manipulated. No wonder … the fines are pocket change – the cost of doing business – for the big banks


Energy Prices Manipulated

The U.S. Federal Energy Regulatory Commission says that JP Morgan has massively manipulated energy markets in California and the Midwest, obtaining tens of millions of dollars in overpayments from grid operators between September 2010 and June 2011.

Pulitzer prize-winning reporter David Cay Johnston noted in May that Wall Street is trying to launch Enron 2.0.


Oil Prices Are Manipulated

Oil prices are manipulated as well.


Commodities Are Manipulated

The big banks and government agencies have been conspiring to manipulate commodities prices for decades.

The big banks are taking over important aspects of the physical economy, including uranium mining, petroleum products, aluminum, ownership and operation of airports, toll roads, ports, and electricity.

And they are using these physical assets to massively manipulate commodities prices … scalping consumers of many billions of dollars each year. More from Matt Taibbi, FDL and Elizabeth Warren.


Everything Can Be Manipulated through High-Frequency Trading

Traders with high-tech computers can manipulate stocks, bonds, options, currencies and commodities. And see this.


Manipulating Numerous Markets In Myriad Ways

The big banks and other giants manipulate numerous markets in myriad ways, for example:

  • Engaging in mafia-style big-rigging fraud against local governments. See this, this and this
  • Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here
  • Pledging the same mortgage multiple times to different buyers. See this, this, this, this and this. This would be like selling your car, and collecting money from 10 different buyers for the same car
  • Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this, this and this
  • Engaging in unlawful “Wash Trades” to manipulate asset prices. See this, this and this
  • Bribing and bullying ratings agencies to inflate ratings on their risky investments





The Big Picture

The experts say that big banks will keep manipulating markets unless and until their executives are thrown in jail for fraud.


Because the system is rigged to allow the big banks to commit continuous and massive fraud, and then to pay small fines as the “cost of doing business”.

As Nobel prize winning economist Joseph Stiglitz noted years ago:

“The system is set so that even if you’re caught,the penalty is just a small number relative to what you walk home with.

The fine is just a cost of doing business. It’s like a parking fine. Sometimes you make a decision to park knowing that you might get a fine because going around the corner to the parking lot takes you too much time.”

Indeed, Reuters points out today:

Switzerland’s regulator FINMA ordered UBS, the country’s biggest bank, to pay 134 million francs ($139 million) after it found serious misconduct in both foreign exchange and precious metals trading. It also capped bonuses for dealers in both units at twice their basic salary for two years.

Capping bonuses at twice base salary? That’s not a punishment … it’s an incentive.

Experts say that we have to prosecute fraud or else the economy won’t ever really stabilize.

But the government is doing the exact opposite. Indeed, the Justice Department has announced it will go easy on big banks, and always settles prosecutions for pennies on the dollar (a form of stealth bailout. It is also arguably one of the main causes of the double dip in housing. And there is no change in the air.)

Indeed, the government doesn’t even force the banks to admit any guilt as part of their settlements. In fact:

"The banks have been allowed to investigate themselves," one source familiar with the investigation told Reuters. "The investigated decide what they want to investigate, what they admit to, and how much they will pay".

Wall Street has manipulated virtually every other market as well – both in the financial sector and the real economy – and broken virtually every law on the books.

And they will keep on doing so until the Department of Justice grows a pair.

The criminality and blatant manipulation will grow and spread and metastasize – taking over and killing off more and more of the economy – until Wall Street executives are finally thrown in jail.

It’s that simple …


12/1/14 Leak at
Federal Reserve

Revealed Confidential
Bond-Buying Details

Then-Chairman Ben Bernanke ordered an internal review of the previously undisclosed leak, which found its way into a newsletter for big investors.

The Federal Reserve sprung a previously unreported leak in October 2012, when potentially market-moving information about highly confidential monetary deliberations made its way into a financial analyst's private newsletter.

The leak occurred the day before the scheduled public release of meeting minutes that shed new light on the Fed's decision to embark on a third round of bond buying to boost the economy, ProPublica has learned.

The newsletter revealed what the minutes would say the next day as well as fresh details about the Fed's internal plans and deliberations – information that could have provided traders with an edge.




2015 Moody's Corp (MCO.N) ratings agency comes as the Justice Department nears a settlement with Standard & Poor's Ratings Services, a unit of McGraw Hill Financial Inc (MHFI.N). Justice Department nears a $1.37 billion settlement with Standard & Poor's for similar alleged conduct, the newspaper reported. The Justice Department sued Standard & Poor's in 2013 for what it said were misleading ratings of residential mortgages leading up to the 2008 financial crisis.




2/1/14 Cyber ring stole secrets for gaming U.S. stock market.
Cybersecurity firm FireEye Inc, said that since the middle of last year, the group has attacked email accounts at more than 100 firms, most of them pharmaceutical and healthcare companies. Victims also include firms in other sectors, as well as corporate advisors including investment bankers, attorneys and investor relations firms. FireEye Threat Intelligence Manager Jen Weedon said the hackers only targeted people with access to highly insider data that could be used to profit on trades before that data was made public. They sought data that included drafts of U.S. Securities and Exchange Commission filings, documents on merger activity, discussions of legal cases, board planning documents and medical research results.Weedon suspects the hackers were trained at Western investment banks, giving them the know-how to identify their targets and draft convincing phishing emails."They are applying their knowledge of how the investment banking community works," Weedon said.