HSBC share price: Lender to pay $1.6m in 'spoofing' probe

A man walks past Deutsche Bank offices in London

A man walks past Deutsche Bank offices in London

CFTC, the USA derivatives regulator, will announce the fines against UBS, Deutsche Bank and HSBC, "Reuters" reported, citing three people with direct knowledge of the matter.

"The defendants in these cases engaged in sophisticated schemes or trading practices aimed at defrauding individuals and entities trading on USA futures exchanges, " said John Cronan, the acting head of the department's criminal division, referring to the eight individuals, Reuters reported.

In one of the cases, the CFTC fined Andre Flotron, a former UBS precious metals trader in Stamford, Conn., and Zurich, with concocting a spoofing scheme for personal and corporate profit.

The department stressed that all defendants were "presumed innocent until proven guilty beyond a reasonable doubt in a court of law".

"Conduct like this poses significant risk of eroding confidence in US markets and creates an uneven playing field for legitimate traders and investors", said John Cronan, acting assistant attorney general, in a written statement.

In spoofing traders place buy and sell orders with the intention of cancelling them before completing the transactions.

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Acting assistant attorney general John Cronan said they were alleged to have engaged in "sophisticated schemes or trading practices aimed at defrauding individuals and entities trading on United States futures exchanges".

After the verdict on Monday, John Cronan, the acting head of the criminal division of the Justice Department, released a statement saying: "Conduct like this poses significant risk of eroding confidence in U.S. markets and creates an uneven playing field for legitimate traders and investors".

Deutsche Bank and UBS have agreed to pay $30 million and $15 million respectively to settle the civil charges in the case, while HSBC will pay $1.6 million, the CFTC said. It will pay $15m. Two other financial institutions were also penalized: HSBC for $1.6 million and Deutsche Bank for $30 million and HSBC $1.6 million.

A spokesman for HSBC said the bank was pleased to have resolved the matter.

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.

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