Financial Regulatory Forum

Convicted inside trader Bauer warns others to “think harder” before breaking the law

By Emmanuel Olaoye

NEW YORK, (Thomson Reuters Accelus) - A former registered representative who was convicted last year of participating in a $37 million insider-trading scheme on Tuesday warned would-be securities law violators to think twice before breaking the law.

Garrett Bauer, a 44-year-old day trader, pled guilty in December to participating in the scheme, which lasted more than 15 years, as part of a three-man ring that included lawyer Matthew Kluger and middleman Kenneth Robinson. (more…)

SEC’s “re-markable” action against Credit Suisse traders

By Thomson Reuters Accelus – Staff

NEW YORK, Feb.10 (Business Law Currents) - A new SEC complaint against former Credit Suisse (CS) employees shines a harsh light on an underappreciated aspect of the financial crisis: mark-to-market manipulation. Charging four traders and investment bankers with violating securities laws, the commission’s civil action (“the complaint”) alleges a “colossal fraud” to misstate the value of bonds held in the bank’s portfolio. U.S. Attorney Preet Bharara of the Southern District of New York also filed a criminal indictment against CS investment banker David Higgs, a managing director of the bank’s London office. Bharara likewise filed a criminal information against CS trader Salmaan Siddiqui, who held the title of vice president.

Unlike more high-profile litigation revolving around the residential mortgage-backed securities (RMBS) and collateralized debt obligations (CDOs), this particular case is noteworthy in that it attacks the accounting behind publicly filed documents, rather than allegations of material misrepresentations in the sales of securities. (more…)

U.S. SEC warns brokers over market access, sub-accounts in debut “risk alert”


By Stuart Gittleman and Brett Wolf

NEW YORK, Sept. 30 (Thomson Reuters Accelus) – The U.S. Securities and Exchange Commission (SEC) issued an unexpected warning to broker-dealers to supervise trading by customers with direct market access, especially customers that trade using master- and sub-accounts.

The notice came in the first in a continuing series of risk alerts the Office of Compliance Inspections and Examinations (OCIE) staff expects to issue. The staff did not say whether OCIE found related deficiencies, or at what level, in recent exams, or in reviewing the findings of recent exams by the Financial Industry Regulatory Authority (FINRA).  (more…)

The compliance lessons, so far, arising from the UBS rogue trader

LONDON, Sept. 23 (Thomson Reuters Accelus) – UBS’s loss of $2.3 billion has hit the headlines worldwide, and while full details of what went wrong are unlikely to be public in the near future there are already compliance lessons for other firms. UK and Swiss regulators have launched an investigation into:

    the details of the unauthorised trading activity;
    the control failures which permitted the activity to remain undetected; and
    the overall strength of UBS’ controls to prevent unauthorised or fraudulent trading activity in its investment bank.

Although the investigation is ongoing, and the regulators have expressly stated that they do not, as yet, have an expected timescale, there are a number of lessons or steps for other firms to consider. (more…)

Dead man walking: The FSA’s aggressive stance with financial services firms

Pedestrians through Canary Wharf business districtBy Christopher Elias

LONDON, Sept. 20 (Business Law Currents) – If the death sentence of the UK’s Financial Services Authority (FSA) was to earn a last request then it may well have been to introduce a new era of aggressive enforcement as it prepares to hand over power to the Financial Conduct Authority (FCA).

It may have slept through the worst financial crisis in living memory and be about to be put to death but this seems to have only invigorated the FSA in its enforcement actions, as it introduces increasingly tough measures on financial firms. Dead man walking? Perhaps. But beware of those boots, as the FSA toughens up its enforcement actions. (more…)

CFTC rules point to crackdown on manipulation: John Kemp

– John Kemp is a Reuters market analyst. The views expressed are his own –

By John Kemp

NEW YORK, Nov 9 (Reuters) – Two proposed regulations published by the U.S. Commodity Futures Trading Commission (CFTC) clarify its power to take enforcement action in cases of market manipulation and are intended to lead to a tougher regulatory regime in future.

The Commission is giving effect to the sweeping provisions of Section 753 Dodd-Frank Wall Street Reform and Consumer Protection Act (PL 111-203) which give it strong new powers over market manipulation and spreading false information.

COLUMN-Even sober brokers can abuse markets out of hours: Kemp

– John Kemp is a Reuters market analyst. The views expressed are his own –

By John Kemp

LONDON, June 29 (Reuters) – With its decision to fine and ban a former oil broker for manipulating the price of Brent crude oil last year as a result of trading while drunk, Britain’s Financial Services Authority (FSA) has continued its push to introduce higher standards into trading on the London commodity markets.

Former PVM oil broker Stephen Noel Perkins was so drunk he had a limited recollection of events and had been in an alcohol induced blackout, according to the FSA’s notice announcing a minimum five-year ban and fining him 72,000 pounds.

U.S. needs needs easier way to prove commodity futures manipulation – regulator

By Christopher Doering
WASHINGTON, Sept 15 (Reuters) – U.S. prosecutors need an easier way to prove manipulation in commodity futures cases in order to better protect the market and consumers, a commissioner with the Commodity Futures Trading Commission said on Tuesday.

(more…)

FTC issues rule to fight oil manipulation

NEW YORK, Aug 6 (Reuters) – The U.S. Federal Trade
Commission said on Thursday it would impose $1 million per day fines on energy traders engaged in price manipulation, a strong signal of the Obama administration’s desire to crack down on fraud in the oil markets.

(more…)

U.S. CFTC supports some limit exemptions – Gensler

CFTC Chairman Gary Gensler (file photo)By Ayesha Rascoe and Christopher Doering
WASHINGTON, July 29 (Reuters) – Commodity Futures Trading Commission Chairman Gary Gensler said Wednesday he supports exemptions from tough new investor limits for bona fide hedgers but he is concerned about allowances for those managing financial risk.

(more…)

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