ORX News digest of the month – January 2018
- 12 February 2018
Every month the ORX News team publishes a featured digest from the ORX News Service. It's a detailed look at one of the losses reported in the media that month, and is handpicked by the team as one of the most interesting stories.
January's digest summary:
Deutsche Bank, UBS and HSBC will pay a total of $46.4m to the US Commodity Futures Trading Commission over allegations some of their traders used spoofing to manipulate the precious metals market for five years between January 2008 and December 2013.
Spoofing is the strategy of placing orders to buy or sell a security without then executing a trade, in an attempt to create the illusion of activity around that security and manipulate its price.
Deutsche Bank agreed to a civil money penalty of $30m, and HSBC and UBS were fined $15m and $1.6m respectively.
On the same day, the Department of Justice charged eight individuals in connection with their roles in the spoofing. Although exchanges have barred the practice for years, it was made illegal as part of the Dodd-Frank Act in 2010, particularly in response to concerns over the scale algorithmic trading could lend to possible manipulation.