Big Banks Busted Massively Manipulating Foreign Exchange, Precious Metals … And Every Other Market

George Washington's picture

Currency Markets Are Rigged

Currency markets are massively rigged. And see this and this.

Reuters notes today:

Regulators fined six major banks including Citigroup (C.N) and UBS (UBSN.VX) a total of $4.3 billion for failing to stop traders from trying to manipulate the foreign exchange market, following a year-long global investigation.

 

HSBC (HSBA.L), Royal Bank of Scotland (RBS.L), JP Morgan (JPM.N) and Bank of America (BAC.N) also face penalties resulting from the inquiry that has put the largely unregulated $5 trillion-a-day market on a tighter leash, accelerated the push to automate trading and ensnared the Bank of England.

 

In the latest scandal to hit the financial services industry, dealers shared confidential information about client orders and coordinated trades to make money from a foreign exchange benchmark used by asset managers and corporate treasurers to value their holdings. Dozens of traders have been fired or suspended.

 

***

 

Britain’s Financial Conduct Authority (FCA) fined five lenders $1.77 billion, the biggest penalty in the history of the City of London, and the U.S. Commodity Futures Trading Commission (CFTC) ordered them to pay a further $1.48 billion.

 

***

 

The U.S. Office of the Comptroller of the Currency, which regulates banks, also fined the U.S. lenders $950 million and was the only authority to penalise Bank of America.

Gold and Silver Are Manipulated

Today, Switzerland’s financial regulator (FINMA) found “serious misconduct” and a “clear attempt to manipulate precious metals benchmarks” by UBS employees in precious metals trading, particularly with silver.

Reuters reports:

Swiss regulator FINMA said on Wednesday that it found a “clear attempt” to manipulate precious metals benchmarks during its investigation into precious metals and foreign exchange trading at UBS …

Gold and silver prices have been “fixed” in daily conference calls by the powers-that-be.

Bloomberg reported last December:

It is the participating banks themselves that administer the gold and silver benchmarks.

So are prices being manipulated? Let’s take a look at the evidence. In his book “The Gold Cartel,” commodity analyst Dimitri Speck combines minute-by-minute data from most of 1993 through 2012 to show how gold prices move on an average day (see attached charts). He finds that the spot price of gold tends to drop sharply around the London evening fixing (10 a.m. New York time). A similar, if less pronounced, drop in price occurs around the London morning fixing. The same daily declines can be seen in silver prices from 1998 through 2012.

For both commodities there were, on average, no comparable price changes at any other time of the day. These patterns are consistent with manipulation in both markets.

Derivatives Are Manipulated

Runaway derivatives – especially credit default swaps (CDS) – were one of the main causes of the 2008 financial crisis. Congress never fixed the problem, and actually made it worse.

The big banks have long manipulated derivatives … a $1,200 Trillion Dollar market.

Indeed, many trillions of dollars of derivatives are being manipulated in the exact same same way that interest rates are fixed (see below) … through gamed self-reporting.

Reuters noted in September:

A Manhattan federal judge said on Thursday that investors may pursue a lawsuit accusing 12 major banks of violating antitrust law by fixing prices and restraining competition in the roughly $21 trillion market for credit default swaps.

 

***

 

“The complaint provides a chronology of behavior that would probably not result from chance, coincidence, independent responses to common stimuli, or mere interdependence,” [Judge] Cote said.

 

The defendants include Bank of America Corp, Barclays Plc, BNP Paribas SA, Citigroup Inc , Credit Suisse Group AG, Deutsche Bank AG , Goldman Sachs Group Inc, HSBC Holdings Plc , JPMorgan Chase & Co, Morgan Stanley, Royal Bank of Scotland Group Plc and UBS AG.

 

Other defendants are the International Swaps and Derivatives Association and Markit Ltd, which provides credit derivative pricing services.

 

***

 

U.S. and European regulators have probed potential anticompetitive activity in CDS. In July 2013, the European Commission accused many of the defendants of colluding to block new CDS exchanges from entering the market.

 

***

 

“The financial crisis hardly explains the alleged secret meetings and coordinated actions,” the judge wrote. “Nor does it explain why ISDA and Markit simultaneously reversed course.”

In other words, the big banks are continuing to fix prices for CDS in secret meetings … and have torpedoed the more open and transparent CDS exchanges that Congress mandated.

Interest Rates Are Manipulated

Bloomberg reported in January:

Royal Bank of Scotland Group Plc was ordered to pay $50 million by a federal judge in Connecticut over claims that it rigged the London interbank offered rate.

 

RBS Securities Japan Ltd. in April pleaded guilty to wire frauda s part of a settlement of more than $600 million with U.S and U.K. regulators over Libor manipulation, according to court filings. U.S. District Judge Michael P. Shea in New Haventoday sentenced the Tokyo-based unit of RBS, Britain’s biggest publicly owned lender, to pay the agreed-upon fine, according to a Justice Department Justice Department.

 

Global investigations into banks’ attempts to manipulate the benchmarks for profit have led to fines and settlements for lenders including RBS, Barclays Plc, UBS AG and Rabobank Groep.

 

RBS was among six companies fined a record 1.7 billion euros ($2.3 billion) by the European Union last month for rigging interest rates linked to Libor. The combined fines for manipulating yen Libor and Euribor, the benchmark money-market rate for the euro, are the largest-ever EU cartel penalties.

 

Global fines for rate-rigging have reached $6 billion since June 2012 as authorities around the world probe whether traders worked together to fix Libor, meant to reflect the interest rate at which banks lend to each other, to benefit their own trading positions.

To put the Libor interest rate scandal in perspective:

  • Even though RBS and a handful of other banks have been fined for interest rate manipulation, Libor is still being manipulated. No wonder … the fines are pocket change – the cost of doing business – for the big banks

Energy Prices Manipulated

The U.S. Federal Energy Regulatory Commission says that JP Morgan has massively manipulated energy markets in California and the Midwest, obtaining tens of millions of dollars in overpayments from grid operators between September 2010 and June 2011.

Pulitzer prize-winning reporter David Cay Johnston noted in May that Wall Street is trying to launch Enron 2.0.

Oil Prices Are Manipulated

Oil prices are manipulated as well.

Commodities Are Manipulated

The big banks and government agencies have been conspiring to manipulate commodities prices for decades.

The big banks are taking over important aspects of the physical economy, including uranium mining, petroleum products, aluminum, ownership and operation of airports, toll roads, ports, and electricity.

And they are using these physical assets to massively manipulate commodities prices … scalping consumers of many billions of dollars each year. More from Matt Taibbi, FDL and Elizabeth Warren.

Everything Can Be Manipulated through High-Frequency Trading

Traders with high-tech computers can manipulate stocks, bonds, options, currencies and commodities. And see this.

Manipulating Numerous Markets In Myriad Ways

The big banks and other giants manipulate numerous markets in myriad ways, for example:

  • Engaging in mafia-style big-rigging fraud against local governments. See this, this and this
  • Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here
  • Pledging the same mortgage multiple times to different buyers. See this, this, this, this and this. This would be like selling your car, and collecting money from 10 different buyers for the same car
  • Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this, this and this
  • Engaging in unlawful “Wash Trades” to manipulate asset prices. See this, this and this
  • Bribing and bullying ratings agencies to inflate ratings on their risky investments

The Big Picture

The experts say that big banks will keep manipulating markets unless and until their executives are thrown in jail for fraud.

Why? Because the system is rigged to allow the big banks to commit continuous and massive fraud, and then to pay small fines as the “cost of doing business”. As Nobel prize winning economist Joseph Stiglitz noted years ago:

“The system is set so that even if you’re caught, the penalty is just a small number relative to what you walk home with.

The fine is just a cost of doing business. It’s like a parking fine. Sometimes you make a decision to park knowing that you might get a fine because going around the corner to the parking lot takes you too much time.”

Indeed, Reuters points out today:

Switzerland’s regulator FINMA ordered UBS, the country’s biggest bank, to pay 134 million francs ($139 million) after it found serious misconduct in both foreign exchange and precious metals trading. It also capped bonuses for dealers in both units at twice their basic salary for two years.

Capping bonuses at twice base salary?  That’s not a punishment … it’s an incentive.

Experts say that we have to prosecute fraud or else the economy won’t ever really stabilize.

But the government is doing the exact opposite. Indeed, the Justice Department has announced it will go easy on big banks, and always settles prosecutions for pennies on the dollar (a form of stealth bailout. It is also arguably one of the main causes of the double dip in housing. And there is no change in the air.)

Indeed, the government doesn’t even force the banks to admit any guilt as part of their settlements.  In fact:

The banks have been allowed to investigate themselves,” one source familiar with the investigation told Reuters. “The investigated decide what they want to investigate, what they admit to, and how much they will pay.

Wall Street has manipulated virtually every other market as well – both in the financial sector and the real economy – and broken virtually every law on the books.

And they will keep on doing so until the Department of Justice grows a pair.

The criminality and blatant manipulation will grow and spread and metastasize – taking over and killing off more and more of the economy – until Wall Street executives are finally thrown in jail.

It’s that simple …

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zrussell's picture

The roulet table has electromagnets?

The cards are marked?

The dice are loaded?

 

This is such a naughty casino!!

VWAndy's picture

Another super tech friend of mine has been going on job interviews getting the job and then not show up. He says its his way of getting everyone paid right. Maybe the next guy gets a better offer. Who is to say he is wrong?

 

VWAndy's picture

All thats left of the honest economy is the super specialist portion. If they could have replaced them they would have by now.

 You cant train on the job if the skills needed are not avalible in house. Tough shit pal you cant teach what you dont know. A few weaks ago I ran into a guy I used to work with. I was replaced by a parade of guys that have not filled my shoes. They are getting by now with three guys that all suck. Turns out it was all the little things that I did that they miss most. The old school tricks. Tool making,removing broken small bolts,fitting parts right and most of all being good under pressure. That stuff always ended up on my plate. Now its thier 900 lb gorrilla.

 The true power is going back to the producers. Where it always belonged.

Frankly Speaking's picture

Banks do not manipulate, people do! Fine the people who do, not the shareholders and tax payers. As in limiting bonuses to two times annual earnings. That will teach them!

Orwell was right's picture

At first I started to ditch this article, but then went back and re-read.    The information may not be 'new' but it is still relevant.    Compared to some of the other stuff I have read on ZH this morning, a succinct summary of market manipulation, at least makes for a nice 'refresher course' in why I am so pissed off at congress, banksters, and the mass of ignorance that is the general US population.

SoilMyselfRotten's picture

Wooohoooo, with this exposure, metals will trade freely now

P.S. Do i really need a sarc tag?

VWAndy's picture

They say the ends justify the means. I think it very interesting that truth has been just laid right out there. It is the operating M.O.

 

 The logic of it is sound. The catch in this case is the standard could be applied both ways. Fairness and morality have been trumped by lies and brute force. No one is following the rules. Teachers dont teach. Cops dont police. So on and so on. They dont do thier jobs right and have not for a long time. Take the money and run off without doing the job. Or worse doing the oposite of what they were paid to do.

 The true golden rule should apply. No? What are the rules to this game again? Something to think about. A strike would be effective at least as effective as it has been for them. They have effectivly been on strike from 1913 on. As far as duty goes for sure. Ask yourself could we have gotten here if they had done thier jobs the right way? So why should we?

Radical Marijuana's picture

Yes, VWAndy, those who destroy the rule of law are feeding a monster that goes out of control, and then eats them too!

messymerry's picture

When the gravy train stops, the status quo is toast.  The time to get out of the cities is drawing to a close.  Find a quiet community and shelter in place.  When this powder keg explodes, the Jovians will think Earth went nova.  There's no going back now, the only way out is through. 

There will be high demand for bounty hunters to chase down these perps and bring them to justice...

Just sayin'

;-D

we built this city's picture

I  appriciate you when you write about these issues

very impressive  and important article!

but not when you  talk about all your bullshit regarding Israel, Jews , Palestinians and Isis

you should concentrate on the economy

BeetleBailey's picture

WHERE...ARE THE FUCKING....LONG PRISON SENTENCES......?

 

FUCKIN WHERE?

 

FUCK THE FINES.....THROW THESE MOTHERFUCKERS IN PRISON!

Kina's picture

Well writing and talking about it ARE essential....else how is it eventually going to get through the thick skulls of the sheeple, only just startiing to wake because they cant afford enough beer.

 

Stay silent, say nothing, make it secret knowledge. It has to be written about and often so it becomes common knowledge that in all things TPTB are corrupt criminal and owned.

Never One Roach's picture

So will the manipulation stop? Even with some banker fired and some Swiss authorities exposing the illgeal manipulation, will it now be stopped?

VWAndy's picture

It does not have to be this way.

NoWayJose's picture

I manipulate the height of my stack - the big banks manipulate everything else.

Radical Marijuana's picture

"The criminality and blatant manipulation will grow and spread and metastasize – taking over and killing off more and more of the economy – until" THAT PROCESS SHIFTS GEARS TO START MUCH WORSE GENOCIDAL WARS, AND IMPOSE DEMOCIDAL MARTIAL LAW.

It appears like a delusional day dream to expect that "Wall Street executives are finally thrown in jail." There is a collective group of trillionaire mass murderers who almost totally dominate all the political and social institutions within NATO countries. They have already set up the systems to impose democidal martial law upon the masses of muppets, who continue to be incompetent political idiots, or Zombie Sheeple that are getting fleeced to exhaustion, while they are being set up to be slaughtered.

So far, I do not see sufficient indications to believe that anything else could happen than that the psychotic breakdowns of all this collective madness will result in making things overall still get WORSE! As these phenomena of egregiously rigged markets become more painfully obvious, we get more people being forced to ask questions about that, and some tend towards making some superficially correct conclusions, e.g.:

http://www.zerohedge.com/news/2014-11-12/wall-st-now-just-form-legal-gambling

Is Wall St. Now Just A Form Of Legal Gambling?

http://www.zerohedge.com/news/2014-11-09/myopic-domestic-delusion-or-planned-monetary-demolition

Myopic Domestic Delusion or Planned Monetary Demolition

I added my kinds of typical comments to those articles, although there is no practical point to doing that, other than I personally indulge myself in endeavouring to better understand how and why things happen. Decades of doing that have convinced me that while what this article above by George Washington stated is certainly a good summary of the real situation, its conclusion was a silly throw-away line.

There are no good grounds to believe that the "Department of Justice" is going to do anything that they ideally should do. Instead, that Department is now integrated into Homeland Security, whose primarily purpose is to impose democidal martial law, as the way that the actually established systems will really respond to the crises that are being caused by the political economy being based on enforced frauds, which have automatically been getting worse, faster. We are already passed the point where the debt slavery, backed by wars based on deceits, have generated debt insanity numbers, which have no mathematically possible ways to ever be resolved within the established systems, other than by causing death insanities.

I found nothing NEW about the article above. It is merely another well-documented summary of the social situation that we were born into, and have been watching throughout our life time ... Therefore, the following quote continues to be one of my favourites to explain what has been happening, and the direction that these events are headed towards, AT AN EXPONENTIAL RATE, which is inherent to their structure:

http://www.conspiracyarchive.com/NWO/silent_weapons_quiet_wars.htm

Silent Weapons for Quiet Wars

"Energy is recognized as the key to all activity on earth. Natural science is the study of the sources and control of natural energy, and social science, theoretically expressed as economics, is the study of the sources and control of social energy. Both are bookkeeping systems: mathematics. Therefore, mathematics is the primary energy science. And the bookkeeper can be king if the public can be kept ignorant of the methodology of the bookkeeping. ... In this structure, credit, presented as a pure element called "currency," has the appearance of capital, but is in effect negative capital. Hence, it has the appearance of service, but is in fact, indebtedness or debt. ... if balanced in no other way, will be balanced by the negation of population (war, genocide)... They must eventually resort to war to balance the account, because war ultimately is merely the act of destroying the creditor ... War is therefore the balancing of the system by killing the true creditors (the public ...) the economy has been transformed into a guided missile on target."

prefan4200's picture

GW, you could have saved your readers a lot of time if you just listed the markets that aren't manipulated.

g'kar's picture

Sadly, GW wouldn't have been able to post an article then.

 

This video explains it all:

 

http://www.infowars.com/feminists-demand-censorship-of-princess-leia-cat...

COSMOS's picture

Too little too late.  The chinese are opening up or have opened up already their own trade centers in Asia.  Round eye wont be able to skim so much anymore.

Reaper's picture

Our courts and government prosecutors are bought. Financial crimes by Wall Street and big banks would be prosecuted in the Southern District of NY federal courts. The attorney for the Southern district is Preet Bahara, former attorney for Chuck Schumer. Schumer controls both the executive agencies of the federal government and the appointments to both lower district courts in NY and the overseeing Second Circuit appeals court. No one is appointed without Schumer approval.

Schumer also controls the Senate appointments of US attorneys for the federal districts. Schumer sits on the Finance and Judiciary committees. Schumer is Chairman of the Rules and ethics Committee, where, "any legislation related to ethics and lobbying reform must pass." http://www.schumer.senate.gov/About%20Chuck/committeeassignments.htm

Schumer collects NY financial campaign contributions which he launders on to other Democrat Senators, which increases Schumer's power.http://go.bloomberg.com/political-capital/2012-10-24/schumer-1-million-f... Schumer shakes down lobbyists and hedge funds. http://www.washingtonexaminer.com/schumers-racket-lobbyists-and-hedge-fu... Schumer fed at Madoff's trough. http://wallstreetonparade.com/2014/10/new-book-senator-schumer-was-regul... Schumer also put Lynch, present AG nominee, as US Attorney for Eastern District of NY.

The Entire Second Circuit and all its prosecuting attorneys are tools placed by Schumer. Lynch, the next AG nominee was already in Schumer's pocket. Sotomayer was promoted twice by Schumer. If you know of any honest judge in the Second Circuit, please reveal him/her. A solution is to abolish the present courts and establish new courts as is the power granted to the US Congress by Article 3 Section 1 to change the courts from time to time. Venal is too mild word to describe our courts, judges and prosecutors.

spinone's picture

Thats just the tip of the iceberg.

Otrader's picture

Tribe going after tribe?  Never!!

assistedliving's picture
Wilkerson would soon be sentenced to life in prison for stealing a pair of plain white tube socks worth $2.50.

http://www.rollingstone.com/politics/news/cruel-and-unusual-punishment-the-shame-of-three-strikes-laws-20130327#ixzz3Itl9Z6oV

blindman's picture

g,
here an interesting interview.
Letters and Politics, for November 12, 2014 - 10:00am
http://www.kpfa.org/archive/id/108380
karen armstrong.
.
Filmed February 2008 at TED2008
Karen Armstrong: My wish: The Charter for Compassion
http://www.ted.com/talks/karen_armstrong_makes_her_ted_prize_wish_the_ch...
.
Are we all Financial Muppets Now?
https://www.youtube.com/watch?v=kvsS9YJQ510
.

reply
Mi Naem
"
The repeatedly implied assertion of your video, that the FDA and it's drug approval and oversight processes are a model for good governance of Wall Street, would be hilarious if it wasn't so nauseating.
"
reply
"
i agree the analogy is flawed, but there is still
an important point there. nausea and suicidal ideation
are mere side effects of the good team made by abilify
and your favorite anti depressant. remeron (mirtazapine)
,and another pharma products, were found in robin williams
upon autopsy. it is banned for use in children as it
causes suicidal thoughts and acts.
the bankers and financial engineers are homicidal, suicidal
but they don't know or care, that is the point. my guess is
neither do most medicated people.
.
maybe this will get you to throw up this morning?
.
"..This was why the former Labor government did not conclude the bilateral trade agreement with Korea (Kafta) – it contained an ISDS clause. Our concerns were far from scaremongering, but the Coalition government didn’t share them, and signed the agreement back in April. The TPP also contains ISDS clauses that have been extensively criticised. Robb expects it to be concluded by the end of the year.

ISDS clauses present a sovereign risk to national governments and court systems. It wasn’t always so. They were originally created to protect businesses that invested in foreign jurisdictions where there may not have been robust democracies and legal systems, so that investors would have international redress if there was a coup, a takeover of their investments or some other unforeseen negative impact on their business in the nature of sovereign risk.

Over time, the reasonable shield offered by ISDS clauses has become a sword, used by multinational corporations to extract profit and market advantage, against the legitimate interests and values of a nation, its government and people." m.p.
.
http://www.theguardian.com/commentisfree/2014/oct/29/why-support-the-tpp...
.
Why support the TPP when it will let foreign corporations take our democracies to court?
Melissa Parke
.
they are destroying the constitution (just a piece of paper) and
maybe one person in a million sees it? they use finance, the money
system and law in combination with medications to accomplish it.
good night.
"
"
it was a rhetorical question,
"are we all financial muppets now?"
look around, muppets, as far as the eye can see
and becoming more so.
"hilarious and nauseating", i would rather say
provocative.

TeethVillage88s's picture

Nice Audio, explains nationalism in a new way tied to previous model of State and Religion. 27 minutes in after she lays out serfdom.

Letters and Politics, for November 12, 2014 - 10:00am
http://www.kpfa.org/archive/id/108380
karen armstrong.

Real new piece of the puzzle.

TeethVillage88s's picture

Zaibatsu Blindman. Military Republics have common features it seems:

- Government Support of the Largest Corporations
- Marriage of Corporations to Financial Corporations
- Government Marriage to Corporations
- Huge MIC supported by government & Lobbying
- Today we add in Computer IT Technology, Communications Tele-coms, Satellites, Social Websites, Spying
- And Financial Markets Rigging & Fraud & Anti-Trust Violations to join the Racketeering Violations

As the guy below says:

I'm a shocked! Look at my Shocked a face!!

Downtoolong's picture

“ I’m shocked, just shocked”, said ever senior executive at every TBTF bank who did exactly the same thing when they were an FX trader.

“This is entirely against our trading policy……which we just re-wrote last week”.

  

stewie's picture
Big Banks Busted Massively Manipulating Foreign Exchange, Precious Metals … And Every Other Market

... busted by ZH, five years ago.  Yawn.

 

 

Kina's picture

I am glad you care enough to point this out.

Yes indeed from the evidence ZH and others have been pointing out the obvious....however investigators for some reason have taken a while to see the obvious.

I think having established the precedent that blatant illegal criminal activity in all areas of finance is punished severly by small fines and hand slaps and reducing bonuses by a few million, that they then can suddenly discover more corrupt manipulation in gold..so that they wont have to jail anybody or punish anybody harshly.

 

So now we have somebody among them discover that gold has also been manipulated. Wonder what caused them to discover it now.....maybe just get it out the way with a few fines and move on, and keep on doing it.

DarkLordofSadNews's picture

Looks like Obama took a while but atleast succeeded in fining them wonder What would have happened with republicans ..

Oh.. Yeah another war...

George Washington's picture

Nice number 15 ...

You're right ... ZH WAS covering this 5 years ago.  If all of the criminals were in jail, THEN it would be old news ... But none are, so it's still news.

Also, rounding up information is helpful for people to see the big picture.  Otherwise, it's a piecemeal drip drip drip ... and people don't really get it.

dexter_morgan's picture

followed up immediately by a #1 partisan bullshit comment by darklord.

spinone's picture

Right, GW, I agree.  But writing about it isn't going to change it.  What are we going to DO about it?

steelhead23's picture

Don't worry, we've got a brand new hero in the AG's office - Ms Loretta Lynch (assuming she's confirmed).  No doubt this is change we can all believe in.  [/sarc]

zstard's picture

Good question. Obviously can't work within the system to bring change. The oligarchs took the country from us in a stealthy coup. They own and control the system including the executive, legislative, and judiciary branches, and the military and "law enforcement" (joke). Seems our only hope lies in risking what they have left us, and likely the ultimate sacrifice. But how to organize?

MalteseFalcon's picture

As a friend of mine commented here a few years ago, "when the market no longer serves the needs of the state, the state will end the market." 

These are Potemkin markets. 

A real free market is the free expression of many citizens.  Can't be letting the truth out there, now can we?

deadelephant's picture

I'm voting with my feet.  Started looking for somewhere to move my Chase business accounts to this morning.  Probably long overdue, but better late than never.

maskone909's picture

everyone should really macro these examples. set it up as a hot key cuz there is alot of bullshit out there.  twitter for example.  good stuff.

ninja247's picture

A big picture is always important

Bossman1967's picture

well the small picture are my investments are in the tank and the banks made money the government made the fines and my metals are worth less the investors are the only losers and that's bullshit

El Oregonian's picture

It will never change until moral people require as much.

Period.