US to arrest bankers in 'spoof' investment orders probe
US authorities were set to arrest several people on Monday in connection with a federal investigation into so-called spoofing and manipulation in the US futures market by three European banks, three people with direct knowledge of the matter told Reuters.
The individuals, some of whom had formerly been employed as traders by UBS, Deutsche Bank and HSBC, will be charged as part of a multi-agency probe by the Commodity Futures Trading Commission, or CFTC, the US Department of Justice and the Federal Bureau of Investigation into the manipulative trading behaviour, two of the sources said.
Reuters reported on Friday that the CFTC was set to announce it had fined UBS, Deutsche Bank and HSBC millions of dollars each to settle the regulator's civil case against the banks for their role in the 'spoofing' and manipulation, which was conducted across a range of futures products.
Spokesmen for all three banks declined to comment on Friday.
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. (Reuters)