Banks fined $2.5 billion, to plead guilty to market rigging

DrBuster · May 20, 2015 1:29AM

Nothing to see here, this doesn't happen, move along.

Banks fined $2.5 billion, to plead guilty to market rigging

cohodk · May 20, 2015 1:38AM

Actually the fine is almost $6 billion and I was interested in exactly what they did. This appears to be some explanation. You will have to remove the * and copy and paste to your browser.

http://www.market*watch.com/story/heres-how-the-cartel-rigged-the-currency-market-2015-05-20

TwoSides2aCoin · May 20, 2015 1:44AM

Just the Forex. Not the whole market, although this manipulation affected the markets world wide. Let's be clear on "market" rigging. It was money manipulation that affected the market, not the market affecting the money.

Evidently, no charges to any individuals. A sign of the widespread involvement.

DrBuster · May 20, 2015 1:46AM

<< 
Evidently, no charges to any individuals. A sign of the widespread involvement. >>

.gov allows it because they know they'll get a cut when they have to do some wrist slapping in public.

cohodk · May 20, 2015 1:53AM

They moved the market by only 100ths of a cent. In massive quantity this can lead to substantial profits but is hardly the "manipulation" that so many feel is rampant...as an example the nonsense that the banksters took gold from 1000 to 1900 to "fleece the sheeple", yet at the same time prevented the price from going to 2500. And then the banksters dropped gold to 1200 to appease the Chinese.

So maybe the banksters make an extra buck or two trading gold. Good for them...the more they make the less they will need on another bailout.

gsa1fan · May 20, 2015 2:31AM

Hang all them damn crooks in central park

Only way to stop it! JMO

Pokermandude · May 20, 2015 2:40AM

<< They moved the market by only 100ths of a cent. In massive quantity this can lead to substantial profits >>

So theft is okay... as long as it's a "small" enough amount?

derryb · May 20, 2015 2:53AM

"How many time do I have to tell you paranoid SOBs, markets are not manipulated."

chumley · May 20, 2015 3:13AM

so who gets the fine money?

roadrunner · May 20, 2015 3:28AM

Currency markets manipulated from 2007-2012 and we get to the truth now? Isn't that a little like closing the barn door long after the barn is empty and sold off for scrap lumber? So do we get the truth of the current 5 year wave of manipulation in 2021?

So let me see if I have this right. Major currency markets definitely move the precious metals and commodities markets quite a bit in very short time frames. But those currency market manipulations had no "real" effect on PMs over those 5 years....and years since? Ok, I got it now.

Just because PMs sustained many rallies over the 2001-2012 period doesn't rule out that the timing of manipulations were detrimental to investors on both sides of the trade. The sheeple were fleeced numerous times on gold's move from $1,000-$1,900....in both directions. The banks got to choose the place and time. Good work if you can get it.

Will there ever be a day when these same banksters are fined for manipulating the PM markets? Not likely if the CFTC has anything to say about it. If you can rig currencies and interest rates (both already proven) what else do you need to push all the markets where you want them?

derryb · May 20, 2015 3:28AM

<< so who gets the fine money? >>

The bigger crooks.

Edited to add, per Market Watch:

"Checks will soon get sent to the Justice Department, Federal Reserve, Commodity Futures Trading Commission, New York State Department of Financial Services and the U.K.’s Financial Conduct Authority. But what does all that cash get used for?

For deficit reduction, mostly.

The Fed and the CFTC say they just send their fines to the U.S. Treasury. The New York State department sends its fines to the state’s general fund, and that — after subtracting fees to conduct investigations — is what Britain’s FCA does as well.

The Justice Department’s situation is more complex. It is set to get $2.7 billion, and that money goes to a victims’ fund."

And let's not forget the taxpayer funded bonuses to all the government workers involved.

roadrunner · May 20, 2015 3:35AM

Have to love the irony where "likely" being involved in deflating NFL footballs gets you a suspension for 25% of the year/season. Yet no traders or their bosses are seeing any suspensions for these currency market manipulations? Makes sense to me.

johnny9434 · May 20, 2015 5:15AM

<< Hang all them damn crooks in central park

Only way to stop it! JMO >>

theres many out there that are willing to help out on that as well

derryb · May 20, 2015 10:57AM

pf70collector · May 20, 2015 10:26PM

The days of Enron prosecution have ended. No difference between manipulating energy prices and manipulating the market. We have a corrupt DOJ and Congress who could do something about it. Seems even the lone wolf Elizabeth Warren is powerless. Probably a revolving door of DOJ lawyers there who don't want to jeopardize their opportunities to work for the big banks.

dpoole · May 20, 2015 10:48PM

The Federal DOJ Protection Racket continues.

You banks can continue what you're doing. Nobody in charge there gets hurt. All it will cost you is your occasional pocket-change.

derryb · May 20, 2015 11:09PM

<< The days of Enron prosecution have ended. No difference between manipulating energy prices and manipulating the market. We have a corrupt DOJ and Congress who could do something about it. Seems even the lone wolf Elizabeth Warren is powerless. Probably a revolving door of DOJ lawyers there who don't want to jeopardize their opportunities to work for the big banks. >>

What we need are some whistleblowers or Snowden captured emails from the regulatory agencies.

What amazes me is the fact that the banks did this yet no people were held accountable except for a handful of traders who were fired only because it was part of the plea arrangement.

cohodk · May 20, 2015 11:20PM

Enron disrupted lives, business, and directly cost people money. While certainly not "right", I don't see direct damage to people's lives or finances in this activity.

gsa1fan · May 20, 2015 11:48PM

So we let the white collar crook ~SLIDE?

I'm having a hard time with the new normal way of thinking.

Maybe the mob runs wall street now, that I can make sense of

derryb · May 20, 2015 11:48PM

<< Enron disrupted lives, business, and directly cost people money. While certainly not "right", I don't see direct damage to people's lives or finances in this activity. >>

Same could be said about stealthy, slow inflation, but in the end it damages peoples lives and finances. All those illegal forex profits came at a cost to someone.

Even worse is it's contribution to the culture of greed and corruption. Like stripping to get on an airplane, one day it will be accepted without question.

roadrunner · May 21, 2015 1:24AM

5 years of manipulating world currencies (and interest rates)? That has a far larger effect than just a single corporation such as Enron. Currency prices touch every market in the world.

But the one thing in common is that our same banker buddies were snared in the Enron failure:

Citigroup and JPMorgan agree to pay a total of $4.2 billion to settle Enron litigation related to a class-action suit from defrauded investors.

Things never change. Plenty of fraud to go around the past 15 years.

jmski52 · May 21, 2015 3:05AM

Skilling did go to jail, and who knows where Ken Lay really is. And by golly, they nailed Martha Stewart but that was back in the old days already. I really would like to see the cheats and frauds spend some jail time in a less-than-country club environment. But, it ain't gonna happen in my lifetime. I really am tired of the double standards in law and regulation.

cohodk · May 21, 2015 7:53AM

Someone cuts down a tree for Christmas from a National Park. Someone else cuts down a tree for Christmas from your town park. Both are identical acts of destruction of public property. Does society view these acts the same? Should they be viewed the same? Should the punishment be the same?

Im not defending the banksters actions, just putting in context.

I do believe there were injuries resulting from traffic accidents due to inoperable traffic lights when the Enron crap, maybe even a death. Does it matter if the US dollar closes at 83.28 today, and 83.43 tomorrow, and 83.28 the next day?

I understand the frustration and desire for "fairness and equality", but really, this is just a molehill in human society.

gsa1fan · May 21, 2015 9:26AM

No it's about principle nothing else to me stealing is stealing.

Now stealing food to eat or feed your family~I can turn a blind eye to.

Stealing because you can get away with it is pure greed! I'm sure all those involved knew right from wrong.

derryb · May 21, 2015 9:29AM

It's about two sets of standards. And that is already proving to be more than a molehill in burning cities across the country.

DrBuster · May 21, 2015 9:38AM

So, if you know the range, the math, the pattern behavior...make the play.

Swapping shorts and longs with counter accounts that have amounts in play tnat can swing and guarantee substantial monies....nothing to see there at all, move along, maths is the hard.

roadrunner · May 21, 2015 10:00AM

The context is that if you or I ran a "trading room" where we were manipulating currencies illegally....we'd not only have to pay a ridiculous fine....but do years of hard time.....a lot more time than Martha Stewart got.

derryb · May 21, 2015 10:45AM

<< The context is that if you or I ran a "trading room" where we were manipulating currencies illegally....we'd not only have to pay a ridiculous fine....but do years of hard time.....a lot more time than Martha Stewart got.

>>

Especially if you were a one man operation working out of your parents' London basement.

DrBuster · May 21, 2015 12:46PM

<< 

<< The context is that if you or I ran a "trading room" where we were manipulating currencies illegally....we'd not only have to pay a ridiculous fine....but do years of hard time.....a lot more time than Martha Stewart got.

>>

Especially if you were a one man operation working out of your parents' London basement. >>

And did nothing that congress hasn't exempted themselves from prosecution for.

Martha took a giant piece of BS for the team...never thought that was proper.

derryb · May 21, 2015 1:03PM

JPM's Dimon says bank has a “historically strong culture.”

derryb · May 21, 2015 10:33PM

running a criminal cartel is expensive...but at least no one's in jail.

bronco2078 · May 21, 2015 10:52PM

The finance sector is always going to be suspect. Being paid large amounts of money for doing things that are of no use to anyone is pretty close to stealing for a living .

It's part of a greater problem here of an economy full of do nothing jobs and parasites .

Unfortunately if you were to eliminate jobs that provide no concrete benefit to society the unemployment rate would probably be about 80%

derryb · May 21, 2015 10:54PM

<< Unfortunately if you were to eliminate jobs that provide no concrete benefit to society the unemployment rate would probably be about 80%

>>

And what ya gonna do with all those unemployed government servants?

derryb · May 23, 2015 7:23AM

Three years probation. Weren't they already on probation? If not, why?

bronco2078 · May 24, 2015 6:37AM

CEO's need to serve time for this crap. What is the point of fining the stockholders ?

derryb · May 24, 2015 6:40AM

<< CEO's need to serve time for this crap. What is the point of fining the stockholders ? >>

More importantly, what's the point of paying CEOs outrageous money if they are not accountable to the courts.

A Sampling of Citigroup’s Rap Sheet Since 2008:

December 11, 2008: SEC forces Citigroup and UBS to buy back $30 billion in auction rate securities that were improperly sold to investors through misleading information.

February 11, 2009: Citigroup agrees to settle lawsuit brought by WorldCom investors for $2.65 billion.

July 29, 2010: SEC settles with Citigroup for $75 million over its misleading statements to investors that it had reduced its exposure to subprime mortgages to $13 billion when in fact the exposure was over $50 billion.

October 19, 2011: SEC agrees to settle with Citigroup for $285 million over claims it misled investors in a $1 billion financial product. Citigroup had selected approximately half the assets and was betting they would decline in value.

February 9, 2012: Citigroup agrees to pay $2.2 billion as its portion of the nationwide settlement of bank foreclosure fraud.

August 29, 2012: Citigroup agrees to settle a class action lawsuit for $590 million over claims it withheld from shareholders’ knowledge that it had far greater exposure to subprime debt than it was reporting.

July 1, 2013: Citigroup agrees to pay Fannie Mae $968 million for selling it toxic mortgage loans.

September 25, 2013: Citigroup agrees to pay Freddie Mac $395 million to settle claims it sold it toxic mortgages.

December 4, 2013: Citigroup admits to participating in the Yen Libor financial derivatives cartel to the European Commission and accepts a fine of $95 million.

July 14, 2014: The U.S. Department of Justice announces a $7 billion settlement with Citigroup for selling toxic mortgages to investors. Attorney General Eric Holder called the bank’s conduct “egregious,” adding, “As a result of their assurances that toxic financial products were sound, Citigroup was able to expand its market share and increase profits.”

November 2014: Citigroup pays more than $1 billion to settle civil allegations with regulators that it manipulated foreign currency markets. Other global banks settled at the same time.

May 20, 2015: Citicorp, a unit of Citigroup becomes an admitted felon by pleading guilty to a felony charge in the matter of rigging foreign currency trading, paying a fine of $925 million to the Justice Department and $342 million to the Federal Reserve for a total of $1.267 billion.

cohodk · May 24, 2015 7:49AM

"Buy gold at $1800, cuz its going to $2500-5000".

How many good folks fell to that scam? And they actually were hurt in the pocketbook. Anybody go to jail for that promotion?

bronco2078 · May 24, 2015 8:12AM

<< "Buy gold at $1800, cuz its going to $2500-5000".

How many good folks fell to that scam? And they actually were hurt in the pocketbook. Anybody go to jail for that promotion? >>

it's not the same thing at all. Gold is a lump of something , even if you pay too much you can still hold it . The banks are ripping people off without delivering anything tangible.

They did it in the mortgage market worse than anywhere else. There is no actual justification for houses to increase in prices year of year . That whole giant bubble was blown jointly by the banks and a complicit government and regular people didn't benefit from it at all.

TV sets get cheaper why don't houses? Answer because the banks haven't figured out how to profit from rigging the TV set market.

Theres no reason for mortgage backed securities to exist at all . No reason for fannie and freddie either.

How about we stop blowing bubbles and stop securitizing everything and let things actually trade for what they are worth?

cohodk · May 24, 2015 8:26AM

Aren't you a builder?

bronco2078 · May 24, 2015 8:56AM

I am but if I was getting paid more I'd be pretty happy .Instead the extra money goes right in the woodtick's wallets.

By woodticks I mean bankers , lawyers , real estate drones and of course governments that only grow along with tax revenues .

I can drive around and see houses I worked on in 1981 still standing. A certain level of finance is needed in that process maybe 10% of what we have now. Real banks used to write mortgages and they did their due diligence because they would suffer .

Trading MBS is not like trading stocks , theres no level of due diligence that can protect a buyer if the details are deliberately hidden . They were created to institutionalize theft .

As a builder I'd be happiest with a buyer who intended to live their whole life in 1 house and I'd do the very best I could.

Watching these flippers and wannabee millionaires getting skinned over and over is depressing.

roadrunner · May 24, 2015 11:30AM

<< "Buy gold at $1800, cuz its going to $2500-5000".

How many good folks fell to that scam? And they actually were hurt in the pocketbook. Anybody go to jail for that promotion? >>

How many good folks fell for Sinclair's "scam" in 2001 when at <$300/oz he said gold was going to $1200? And then $1650 once $1,000 got reached? Should someone have gone to jail for taking the short side of that? How about Bob Prechter as he was a loud gold short from $300/oz right up to $1,000/oz. I think he finally jumped on the "long" train after the move to $1200+. I'd bet over half the coin forum could have been prosecuted since they were vocal shorts from 2002-2010. Forum bulls were hard to find from 2001-2007. Most forum bears were convinced gold was dead by $435, and very few saw it going past $600-$730. How many good folks got sucked into that shorting scam?

Anyone go to jail for promoting stocks from 2000-2011? Buy stocks at DOW 12,000 because it's going to 36,000? There were books on that subject. Unfortunately, it went to 6600 on the way to new highs....being essentially dead money for 12-13 years. The irony is that gold and silver have still been the far better play vs. stocks from 2000-2015.

The SEC or CFTC never saw fit to investigate anyone for promoting the long side of gold at $1800. So at least from their perspective, there was no "coordinated" scam worth prosecuting. If you did buy into $1800+ gold in Sept 2011, you had a chance in Sept 2012 to get out at $1790+. So far the CFTC has not found any wrong doing of any sort in the precious metals markets other than a few TBTF banks claiming they were vaulting gold for clients when in fact they didn't have any. Let's get real though. There were huge losers (ie homeowners and investors) who lost $TRILLIONs in the MBS debacle of 2006-2009. Whatever losses gold suffered were a trifle compared to huge losses in the manipulated RE market. And as of yet, not a single person prosecuted....or in jail. And we're going to compare that to those recommending of gold at $1800?....most who had never bought an otc gold derivative in their life. It's quite possible a lot of those bullish buy recommendations for gold at $1800 were originating from the TBTF bankers who were taking the short side bets. I'd expect nothing less of them. What were the gold price targets from GS and JPM in August 2011? Funny, the TBTF's have been fined $BILLIONs for manipulating everything from interest rates to currencies....but it "never occurred" to them to manipulate the PMs'...lol.

cohodk · May 24, 2015 2:48PM

Yes, of course Roadrunner. Lol

The fools should have just bought stocks----the best performing asset class for the last 4 generations. Lol

Maybe times are a changing. Lol

I got to ya, eh?

Happy memorial day eveyone.....loving this great country.

Musky1011 · May 25, 2015 12:39AM

And no one goes to prison

derryb · May 29, 2015 6:34AM

Silk Road founder sentenced to life in prison, criminal bank CEOs don't even see a day in court.

Banks fined $2.5 billion, to plead guilty to market rigging

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