Financial Regulatory Forum

Spoofing or just fast trading? Chicago case helps unwrap mystery

By Guest Contributor
November 19, 2015

By Richard Satran, Regulatory Intelligence

NEW YORK, (Thomson Reuters) – Compliance professionals were startled when a jury in the futures industry’s home base of Chicago convicted a veteran commodities trader of “spoofing,” a crime punishable by up to 25 years in prison but involving a kind of market manipulation once thought too vaguely defined to be prosecuted. It was surprising that a case of such complexity could be brought to such a conclusion, even more that jurors took just an hour of deliberation to do so.

COLUMN: “Swindle & Fraud” – America’s great tradition, from Lapham’s Quarterly

June 16, 2015

It is easy to fall into the belief that we are living in special times; that greed, avarice, fraud, and swindle are at new heights; that bankers are worse than they’ve ever been; that public trust in them is at historic lows. Nearly every day we learn of yet another major fine imposed on a bank for some wrongdoing, all this while the leaders of finance lament the burdensome rules they must now work under.
Pity them, and pity us, but life has always been that way, or at least that is the lesson drawn in reading the latest edition of Lapham’s Quarterly “Swindle & Fraud.” We are reminded that humans have a long history of behaving badly, and efforts to change that reality have usually run aground. Deception, lies, fraud and confidence tricksters are part of our fabric, whether in business or finance, on a New York street corner, Barnum’s circus, or ancient Greece. (more…)

Forget HFT; “High Intelligence Trading” is the new frontier for technology, markets, regulation

By Guest Contributor
April 10, 2014

By Henry Engler, Compliance Complete

NEW YORK, Apr. 10, 2014 (Thomson Reuters Accelus) – While fast is good, smart is better, and with untold resources of computing power and memory banks in the clouds, the new frontier in electronic trading combines sophisticated intelligent software with rapid-fire processing, enabling traders to stay one step ahead of the regulators.

Barclays scandal highlights value of monitoring and testing – governance experts

By Guest Contributor
July 10, 2012

By Emmanuel Olaoye

WASHINGTON/NEW YORK, July 10 (Thomson Reuters Accelus) – A major theme in the Barclays scandal over rate-rigging is the firm’s failure to conduct adequate monitoring and testing of its compliance program, governance experts have told Thomson Reuters Accelus.

Barclays’ governance, compliance weaknesses exposed in U.S. regulator’s findings

By Guest Contributor
July 3, 2012

By Emmanuel Olaoye

WASHINGTON/NEW YORK, July 3 (Thomson Reuters Accelus) – A U.S. regulator’s case against Barclays revealed significant failures with the bank’s internal controls as well as failures with its corporate governance.

Compensatory penalties, hedge-fund insider cases mark SEC enforcement trends

By Guest Contributor
March 14, 2012

By Nick Paraskeva

NEW YORK, March 14 (Thomson Reuters Accelus) – The U.S. Securities and Exchange Commission wants more power to fine firms and individuals for fraud and market abuses, in the face of tougher public scrutiny and judicial opposition to recent settlements. While the agency has been imposing stiffer penalties, the amount remains constrained by the agency’s current authority, said George Canellos SEC New York Regional Office Director.

Einhorn/Greenlight Capital fine highlights duty for investors to seek absolute clarity over inside information

By Guest Contributor
January 26, 2012

By Martin Coyle and Alex Robson

LONDON/NEW YORK, (Thomson Reuters Accelus) – A decision by the UK Financial Services Authority (FSA) to fine hedge fund manager David Einhorn and his Greenlight Capital fund 7.3 million pounds ($11.5 million) has highlighted the need for professional investors to ascertain clearly what constitutes inside information, securities lawyers said. The FSA said that it fined Einhorn 3.64 million pounds and Greenlight Capital 3.65 million pounds for using inside information that he obtained from a broker before selling shares in a UK public company in 2009. Einhorn’s is the biggest scalp by far of the FSA’s renewed determination to punish market manipulation as part of its “credible deterrence” policy.

COLUMN – Rogue traders, delta trading and exchange-traded funds

By Guest Contributor
October 7, 2011

By Helen Parry, the views expressed are her own.

LONDON, Oct. 7 (Thomson Reuters Accelus) – There are many common features in cases of rogue or unauthorised trading, including the use by ostensibly riskless arbitrage traders of fictitious trades on internal systems to mask their unhedged positions. One obvious feature that is present in many rogue trader cases has been a failure in trade confirmation systems and controls. This feature frequently appears conterminously with the fact that a trader has intimate knowledge of and/or power and influence over middle and back office systems. (more…)

COLUMN-FSA coffee case heralds commods crackdown: John Kemp

By Reuters Staff
June 2, 2010

LONDON, June 2 (Reuters) – The Financial Services Authority’s (FSA) decision to fine a London coffee broker 100,000 pounds ($146,400) and ban him from working in the financial services industry marks a significant toughening in the market abuse regime for commodities.