"A Clear Attempt To Manipulate Fixes In The Precious Metal Market"
Submitted by Tyler Durden on 11/12/2014 08:59 -0500
Just in case there is still any confusion, here is Reuters to clear things up.
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.
"The behaviour patterns in precious metals were somewhat similar to the behaviour patterns in foreign exchange," FINMA director Mark Branson said in a conference call with journalists.
He said that as UBS has precious metals and foreign exchange desks under combined leadership, it was not surprising to find similar behaviour.
"But we have also seen a clear attempt to manipulate fixes in the precious metal market."
Luckily, it was only at UBS. As for Andre Flotron, who is "keen to return in due time"… don’t hold your breath.
Caught Rigging FX and Gold? Your Punishment Will Be A Bonus Capped At Just 200% Of Your Base Salary
Tyler Durden on 11/12/2014 08:26 -0500
Here are some more details on today’s headline news: the banks’ wholesale settlement to put FX-rigging in the rearview mirror. First example: if you ever saw your stops taken out from beneath your feet, thank your broker, JPM, which acted against its own clients to crush their stops.
From the FCA’s JPM notice:
JPMorgan’s failings in this regard allowed the following behaviours to occur in its G10 spot FX trading business:
1. Attempts to manipulate the WMR and the ECB fix rates, alone or in collusion with traders at other firms, for JPMorgan’s own benefit and to the potential detriment of certain of its clients and/or other market participants;
2. Attempts to trigger clients’ stop loss orders for JPMorgan’s own benefit and to the potential detriment of those clients and/or other market participants; and
3. Inappropriate sharing of confidential information with traders at other firms, including specific client identities and, as part of (1) and (2) above, information about clients’ orders.
Dozens of dealers have been suspended or fired for sharing confidential information about client orders and coordinating trades to make money from a foreign exchange benchmark used by asset managers and corporate treasurers to value their holdings in the latest scandal to hit the financial industry.
Jim Sinclair’s Commentary
It will be interesting to see if their fiddling with gold and silver just goes away.
Foreign exchange fines: banks handed £2bn in penalties for market rigging
Regulators in US and UK mete out record fines after finding a ‘free for all culture’ on currency trading floors at RBS, HSBC, Citibank, JP Morgan and UBS
Wednesday 12 November 2014 04.18 EST
The corruption of the world’s biggest currency dealers was laid bare on Wednesday when regulators imposed £2bn of fines on five major banks for rigging the £3.5tn-a-day foreign exchange markets.
Regulators said they had found a “free for all culture” rife on their trading floors which allowed the markets to be rigged for five years, from January 2008 to October 2013.
The much-anticipated record settlement with US and UK regulators did not include Barclays, which remains in discussions with other regulators.
Each of the fines imposed on Royal Bank of Scotland, HSBC, Citibank, JP Morgan and UBS were records for the UK’s Financial Conduct Authority (FCA), smashing the penalties imposed over the last two years for Libor rigging.
The government welcomed the action. The chancellor, George Osborne, said: “Today we take tough action to clean up corruption by a few so that we have a financial system that works for everyone. It’s part of a long-term plan that is fixing what went wrong in Britain’s banks and our economy.”
UBS Precious Metals Misconduct Found by Finma in FX Probe
By Nicholas Larkin and Elena Logutenkova Nov 12, 2014 6:24 AM ET
Switzerland’s regulator found “serious misconduct” by UBS AG (UBSN) employees in precious metals trading, particularly with silver, as part of its review of the bank’s foreign-exchange business.
Electronic chats played a “key” role in the improper conduct in foreign exchange and precious metals trading, the Swiss Financial Market Supervisory Authority, or Finma, said in a statement today. It found front running, when traders profit from advance knowledge about a transaction expected to influence prices, over client orders for silver.
The Swiss regulator and those in the U.S. and U.K. ordered UBS and four other banks to pay about $3.3 billion to settle a probe into the rigging of foreign-exchange rates. Precious metals fixings, price-setting rituals dating back a century for gold and silver, were overhauled this year as scrutiny increased on how market benchmarks are set. Barclays Plc was fined in May after a trader sought to influence the gold fix in 2012.
“The behavior patterns in precious metals were somewhat similar to the behavior patterns in foreign exchange,” Mark Branson, Finma’s chief executive officer, said today on a conference call. “We have also seen clear attempts to manipulate fixes in the precious metals markets.”
UBS’s precious metals spot-trading desk has been part of the foreign-exchange desk since 2008 and was subject to the same control and monitoring procedures, according to Finma. Traders engaged in activities including sharing of information on orders, flows and customers as well as front-running and triggering of stop-loss orders, it said.
November 11, 2014
This past week Brazil announced that it will be building a 3,500-mile fiber-optic cable to Portugal in order to avoid the grip of the NSA.
What’s more, they announced that not a penny of the $185 million expected to be spent on the project will go to American firms, simply because they don’t want to take any chances that the US government will tap the system.
It’s incredible how far now individuals, corporations, and even governments are willing to go to protect themselves from the government of the Land of the Free.
The German government, especially upset by the discovery of US spying within its borders, has come up with a range of unique methods to block out prying ears.
They have even gone so far as to play classical music loudly over official meetings so as to obfuscate the conversation for any outside listeners.
They’ve also seriously contemplated the idea of returning back to typewriters to eliminate the possibilities of computer surveillance.
More practically, the government of Brazil has banned the use of Microsoft technologies in all government offices, something that was also done in China earlier this year.
The Red, White, and Blue Scare has now replaced the Red Scare of the Cold War era. And it comes at serious cost.
From Brazil’s rejection of American IT products alone, it is estimated that American firms will lose out on over $35 billion in revenue over the next two years.
Thus, as the foundation of the country’s moral high-ground begins to falter, so does its economic strength.
The irony should not be lost on anyone; on a day when Americans celebrate their veterans’ courage in fighting against the forces of tyranny in the world, we find yet another example of where the rest of the world sees the source of tyranny today.
It’s amazing how much things have changed.
In the past, the world trusted America with so much responsibility.
The US dollar was the world’s reserve currency. The US banking system formed the foundation of the global banking system. US technology became the backbone of the global Internet.
But the US government has been abusing this trust for decades.
Today the rest of the world realizes they no longer need to rely on the US as they once did.
And in light of so much abuse and mistrust, they’re eagerly creating their own solutions.
Just imagine—if Brazil is building its own fiber optic cable to avoid the NSA, it stands to reason that they would create their own alternatives in the financial system to directly compete with the IMF and the US dollar.
Oh wait, they’re already doing that too. Fool me twice, shame on me.
QE isn’t dying, it’s morphing
Monday, November 10, 2014 at 4:05PM
A funny thing happened on the way to the ‘end’ of the multi-trillion dollar bond buying program known as QE – the Fed chronicles. Aside from the shift to a globalization of QE via the European Central Bank (ECB) and Bank of Japan (BOJ) as I wrote about earlier,what lingers in the air of “post-taper” time is an absence of absence. For QE is not over. Instead, in the United States, the process has simply morphed from being predominantly executed by the Federal Reserve (Fed) to being executed by its major private bank members. Fed Chair, Janet Yellen, has failed to point this out in any of her speeches about the labor force, inflation, or inequality.
The financial system has failed and remains a threat to us all. Only cheap money and the artificial inflation of asset values can make it appear temporarily healthy. Yet, the Fed (and the Obama Administration) continue to perpetuate the illusion that making the cost of (printed) money zero by any means has had a positive effect on the population at large, when in fact, all that has occurred is a pass-the-debt-ponzi-scheme co-engineered by the Fed and big US bank beneficiaries. That debt, caught in the crossfires of this central-private bank arrangement, is still doing nothing for American citizens or the broader national or global economy.
The Fed is already the largest hedge fund in the world, with a book of $4.5 trillion of assets. These will plummet in value if rates rise. Cue the banks that are gearing up their own (still small in comparison, but give them time) role in this big bamboozle. By doing so, they too are amassing additional risk with respect to interest rates rising, on top of all their other risk that counts on leveraging cheap money.
Only the naïve could possibly believe that the Fed and its key banks haven’t been in regular communication about this US Treasury security shell game. Yet, aside from a few politicians, such as former Congressman Ron Paul, Congressman Sherrod Brown and Senators Bernie Sanders and Elizabeth Warren, the notion that Fed policy has helped bankers, rather than other people, remains largely divorced from bi-partisan political discussion.