HSBC Holdings PLC (LON:HSBA) plus European peers Deutsche Bank AG and UBS AG have agreed to pay penalties after the US Commodity Futures Trading Commission (CFTC), Justice Department and Federal Bureau of Investigation announced criminal and civil enforcement actions into “spoofing” in metals and equities futures.
HSBC has agreed to pay a civil monetary penalty of US$1.6mln, while Deutsche Bank agreed to pay a US$30mln penalty, and UBS agreed to pay US$15mln.
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All three banks received reduced penalties from the CFTC for providing significant assistance in the investigations, which relate to activity that dates back as far as 2008.
The Justice Department and the country’s derivatives regulator said on Monday they had filed civil and criminal charges against the three European banks and eight individuals for alleged manipulation in the US futures and commodities market.
Spoofing, which is a criminal offence under the 2010 Dodd- Frank financial reform law, involves placing bids to buy or offers to sell futures contracts with the intent of cancelling them before execution.
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By creating an illusion of demand, spoofers can influence prices to benefit their market positions.
The case marks the first time the Justice Department and the CFTC has worked together, along with the FBI, to bring both criminal and civil charges against multiple companies and individuals, and underlined the authorities’ increasing focus on holding individuals accountable for corporate wrongdoing.