US authorities have filed civil and criminal charges against three European banks and eight individuals for alleged manipulation in US futures and commodities markets.
The lenders – UBS, Deutsche Bank and HSBC – agreed to pay $46.6m to settle the cases brought by the Department of Justice (DoJ) and the Commodity Futures Trading Commission (CFTC).
It follows a large-scale investigation into so-called “spoofing” in metals and equities futures.
One of the eight named by the DoJ was James Vorley, 37, of the UK. He was said to have been based in London and employed as a precious metals trader at a leading global financial institution.
The department stressed that all defendants were “presumed innocent until proven guilty beyond a reasonable doubt in a court of law”.
The case centres on allegations that defendants and co-conspirators placed hundreds, or thousands of orders that they did not intend to trade.
These “spoof orders” were said to have had the effect of artificially inflating or deflating prices of futures contracts traded on exchanges in Chicago.
Those behind the spoofs are then alleged to have executed real orders to buy, at artificially low prices, or sell, at artificially high prices “in order to generate trading profits or to illicitly mitigate other trading losses”, the DoJ said.
Acting assistant attorney general John Cronan said they were alleged to have engaged in “sophisticated schemes or trading practices aimed at defrauding individuals and entities trading on US futures exchanges”.
He added: “Conduct like this poses significant risk of eroding confidence in US markets and creates an uneven playing field for legitimate traders and investors.”
The CFTC said Deutsche Bank had agreed to pay $30m to civil charges in the case, covering a period from 2008 to 2014.
Allegations against UBS covered a period from 2008 to 2013. It will pay $15m.
HSBC is to pay $1.6m.
All three banks received reduced penalties for providing assistance in the investigation.
HSBC said the bank was pleased to have resolved the matter.
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Deutsche Bank said it had provided substantial cooperation “and has enhanced controls and surveillance to help ensure that the underlying conduct does not occur in the future”.
UBS did not immediately provide comment.