CFTC Fines Banks for Precious Metals Price Manipulation

The comments above & below is an edited and abridged synopsis of an article by Craig Hemke

Late Friday, reports hit Reuters that the CFTC would soon levy fines for spoofing (placing buy and sell orders with the intent to cancel them before completing the transactions) and price manipulation in the futures markets, and that has come to pass. Read the entire press release

In short, Deutsche Bank, UBS and HSBC will collectively pay nearly $47 million to settle civil regulatory charges that some of their traders engaged in spoofing in precious metals. Deutsche Bank will pay $30 million and UBS $15 million of that total in an investigation by the Commodity Futures Trading Commission.

One of the phrases used in the press release was not particularly vague: “…engaged in a scheme to manipulate the price of precious metals futures contracts…”. Those who have based their careers and cash flow upon the notion that the precious metal markets are free, fair and sacrosanct just got a cold slap of reality.

Will there be arrests and future charges against some of the US banks? Perhaps. For the moment, the CFTC has charged 6 individuals, and the Department of Justice charged 8 with crimes related to deceptive trading in a wide-ranging investigation.