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Crime Pays: How An FX Rigger Made "Most Peoples Year” In One Trade

Tyler Durden's picture




 

Rarely are we speechless, but this occasion, when UBS made $513,000 from just one fix, as the FCA's complaint against the criminal Swiss bank reveals, is the rare exception.

The information disclosed between UBS and Firms A, B and C, regarding their order flows was used to determine their trading strategies. The consequent “building” by UBS and its trading in relation to that increased quantity at the fix were designed to decrease the ECB fix rate to UBS’s benefit. UBS undertook the selling of Euros prior to the 1:15pm ECB fix in anticipation that the fix rate at which it would buy Euros would be lower than the average rate at which it had sold. The placing of a large sell order by UBS immediately prior to 1:15pm was designed to achieve this outcome. UBS’s trading in EUR/USD in this example generated a profit of USD513,000.

 

In the immediate aftermath of the ECB fix, UBS was congratulated on the success of its trading by Firms A, B and C (“hes sat back in his chaoir [sic]…feet on desk…announcing to desk…thats why i got the bonus pool” and “yeah made most peoples year”).

And of course, moments ago, UBS' CEO Ermotti is quick to promise that "there is no place at UBS for those who don't engage in the right behavior." The right behavior, of course, is: NEVER GET CAUGHT!

Source

 

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Wed, 11/12/2014 - 10:56 | 5440065 buzzsaw99
buzzsaw99's picture

i wonder which pension fund he stole it from

Wed, 11/12/2014 - 10:59 | 5440075 Aeternus
Aeternus's picture

Enjoy my money UBS, JUMP! YOU FUCKERS!

 

Now i'm reduced to this after losing it all in the forex markets.

 

https://www.youtube.com/watch?v=2ddyThSL2fg

Wed, 11/12/2014 - 11:02 | 5440086 y3maxx
y3maxx's picture

... Obama will give his comments on this matter, later today from the 10th tee.

Wed, 11/12/2014 - 11:08 | 5440107 pods
pods's picture

What, no bottle of Bollinger?

Even if these people followed the law, they are still nothing but skimmers.  

Depressing.  Tyler, need another article about big ass, stat.

pods

Wed, 11/12/2014 - 11:20 | 5440162 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

Fixed! Now on to another distraction!

Wed, 11/12/2014 - 11:23 | 5440174 Clint Liquor
Clint Liquor's picture

At least we don't have to worry about them doing it again. You know, with all that profit and the piddly-ass fine and all.

Wed, 11/12/2014 - 11:25 | 5440188 SilverIsKing
SilverIsKing's picture

$513,000 is not very impressive actually.  I think they are purposefully trying to underwhelm the public with this figure.

Wed, 11/12/2014 - 11:30 | 5440204 Clint Liquor
Clint Liquor's picture

That was one trade, out of thousands. Billions in profit, millions in fines.

Wed, 11/12/2014 - 14:29 | 5440973 sainchaw
sainchaw's picture

the fines are government shake downs to get their piece of the action 

Wed, 11/12/2014 - 11:32 | 5440206 imaginalis
imaginalis's picture

The traders will be banned from using chat rooms to fix exchange pricing - unless they are on darknet.

Wed, 11/12/2014 - 14:03 | 5440895 sandhillexit
sandhillexit's picture

what's app?

Wed, 11/12/2014 - 11:29 | 5440196 El Oregonian
El Oregonian's picture

The criminality is like a cockroach infestation. You can't just fumigate piece-meal. You have to carpet bomb the whole stink'in house!

http://www.washingtontimes.com/news/2014/nov/12/5-big-banks-fined-3b-in-...

 

Wed, 11/12/2014 - 11:06 | 5440096 Aeternus
Aeternus's picture

I'll downvote my foot up your ass if you don't shut up. Fag.

 

https://www.youtube.com/watch?v=2ddyThSL2fg

Wed, 11/12/2014 - 11:27 | 5440172 Rainman
Rainman's picture

Stealing from which pension fund..? The answer is always the corrupted,  big fat easy target : CalPers .

           http://www.pionline.com/article/20140804/ONLINE/140809953/calpers-enters-into-infrastructure-partnership-with-ubs

Wed, 11/12/2014 - 11:24 | 5440066 GetZeeGold
GetZeeGold's picture

 

 

 

If you're gonna go......go big!

 

This morning seems to be taking on a certain theme.......one of crime. Remember a time when we just figured the cops would show up if someone was doing something wrong?

 

We call those times......."old days".

http://www.youtube.com/watch?v=kRTMWzVoT_U

Wed, 11/12/2014 - 10:56 | 5440068 kowalli
kowalli's picture

hang them up immediately

Wed, 11/12/2014 - 11:32 | 5440200 Ghordius
Ghordius's picture

it does not help. particularly as long as the banks can recruit more of them. as a reminder, the EU Parliament (yes, the elected "law giving" assembly that approves or rejects what the governments of the EU countries propose as multi-party treaties aka EU laws) came with an astonishing law: the Banker Bonus Cap

it's that simple: banking, like insurance, should be boring. take the astronomical bonuses away, and it becomes boring

now of course it will be interesting to see if the City of London megabanks will comply or shift their Masters Of The Universe to NY's Wall Street. the other option is to have the UK leave the EU, and the megabankers stay in London

here an article from the Daily Telegraph describing in conflicted terms how the new British "allowances" are supposed to bypass this EU law

Wed, 11/12/2014 - 10:58 | 5440073 pendragon
pendragon's picture

gaming the system. nothing more

Wed, 11/12/2014 - 11:21 | 5440167 11b40
11b40's picture

Yep, just another 'too big to jail' dude going about his daily grind.  Nothing to see here, so move along.

Wed, 11/12/2014 - 11:00 | 5440074 Notsobadwlad
Notsobadwlad's picture

As reported by whom? Obviously for it to be true an individual had to witness the act and statement and then report it so that it could be inserted into the FCA complaint.

Who reported it? ... we want names. Enquiring minds want to know.

Makes a nice story though.

Wed, 11/12/2014 - 11:02 | 5440082 MsCreant
MsCreant's picture

I don't want names of witnesses, I want prosecutions. 

Wed, 11/12/2014 - 12:50 | 5440559 yellowsub
yellowsub's picture

Well, you certainly won't get that in the US.

Wed, 11/12/2014 - 10:58 | 5440076 skbull44
skbull44's picture

Enough is enough already. Time to invest in pitchforks, tar, and feathers...or perhaps a guillotine....

http://olduvai.ca

Wed, 11/12/2014 - 10:59 | 5440079 Notsobadwlad
Notsobadwlad's picture

Good for you. You are acting exactly how you are intended to act.

Wed, 11/12/2014 - 11:03 | 5440084 MsCreant
MsCreant's picture

How should he act?

Wed, 11/12/2014 - 11:12 | 5440130 pods
pods's picture

Remember Tyler's second picture of Kermit?  Not that roadkill one. 
Just like that.

pods 

Wed, 11/12/2014 - 10:59 | 5440077 LawsofPhysics
LawsofPhysics's picture

This simply speaks to the true purchasing power of fiat.  Let's hope ekm1 is right in his assertions, although I simply don't see it, nor see evidence that it would make a real difference at this point.  Nothing changes unless there are real consequences for bad behavior, if that means reverting to a fuedal system, so be it.  I went long black markets and sharcropping already.  But Nature is chaos, so WWIII is certainly not out of the picture.

Wed, 11/12/2014 - 11:08 | 5440098 q99x2
q99x2's picture

How incredibly wealthy and well off the populations of the world could have been without crooked banksters.

Wed, 11/12/2014 - 11:07 | 5440103 Pairadimes
Pairadimes's picture

This will continue until little red holes start appearing in the foreheads of the criminals at the top of the pyramid.

Wed, 11/12/2014 - 12:36 | 5440501 GetZeeGold
GetZeeGold's picture

 

 

The CDC will launch an investigation of the red hole disease.....perhaps even call in the CFTC.

Thu, 11/13/2014 - 07:37 | 5443362 Ace Ventura
Ace Ventura's picture

+513,000!  BTW Pairadimes, how did you get your animated avatar to work? Mine is supposed to be animated as well, but just shows up as a still image?

Wed, 11/12/2014 - 11:07 | 5440104 alexcojones
alexcojones's picture

Wow, four ZH columns about some Swiss banks and gold.

What happened to the daily click bait booty ?

Maybe Gold & booty somehow combined...

Wed, 11/12/2014 - 11:10 | 5440120 LULZBank
LULZBank's picture

Noting the desperation to place ads in your face, they have to play to the crowd now.

Wed, 11/12/2014 - 11:13 | 5440129 thatthingcanfly
thatthingcanfly's picture

My ZH experience improved dramatically when I installed Firefox's Adblocker.

Wed, 11/12/2014 - 11:44 | 5440259 Cacete de Ouro
Cacete de Ouro's picture

Sometimes the gold is the booty, isn't that right me scurvy sea dogs?

http://youtu.be/GSQDh6e3axc

Wed, 11/12/2014 - 11:11 | 5440127 aleph0
aleph0's picture

$513,000 ?

chicken feed ... and the rest

Wed, 11/12/2014 - 11:24 | 5440150 Mercury
Mercury's picture

Seriously, what trader working for a much smaller firm during a fast -or even a not so fast- market hasn't bagged a similar sized profit on many occasions?

For the math challenged that's the equivalent of a ~$1 move on ~500k shares

Wed, 11/12/2014 - 11:16 | 5440135 Son of Loki
Son of Loki's picture

Jail is for the Little Peeples ... like those who don't mow their lawns ... rob a few candy bars from 7-11's ... joy ride for an hour or two ... Prison is no place for white collar upper crust thieves.

Wed, 11/12/2014 - 11:16 | 5440145 p00k1e
p00k1e's picture

We are supposed to feel bad BKing on unsecured debt.  LOL

These rappers say it best.  Gucci Mane:

G.R.E.E.N. – Get Rich Everything Else is Nonsense.
W.H.I.T.E. – Why Hate Instead Take Everything

Wed, 11/12/2014 - 11:17 | 5440152 firstdivision
firstdivision's picture

Isn't it commonly spewed how the FX market is too large to be manipulated?  Isn't that the normal excuse for having next to no oversight in the FX market?

Wed, 11/12/2014 - 11:24 | 5440175 p00k1e
p00k1e's picture

‘too large to be manipulated’

‘too large to be failed’

220/221 Volts Whatever it takes?

https://www.youtube.com/watch?v=iX3kxAA2L4Q

Wed, 11/12/2014 - 11:25 | 5440187 Clint Liquor
Clint Liquor's picture

Yes, that is one of the lies. Along with Central Planners don't care about Gold because it's just 'tradition'.

Wed, 11/12/2014 - 11:18 | 5440158 p00k1e
p00k1e's picture

‘UBS made $513,000’

Tax rates are different on personal income Vs capital gains.

If you earn 50K a year, they made the equivalent of about 12 years of your income in 1 day.

LOL 

Wed, 11/12/2014 - 11:22 | 5440171 Atomizer
Atomizer's picture

As spoken on earlier Zerohedge thread. Take down the FX silent partners. The cartel will be exposed. Somehow it will lead to K street and City of London.

Enjoy muppets fueling surfism on MSM cable channels..

ISIS will be blamed, we cannot lose a CIA asset. Do you want me to tell you the Isreali's Mossad US banking aid fraud. 

It's Christmas in Zionist Israel. They receive US taxpayers funding. 

Wed, 11/12/2014 - 11:26 | 5440177 Government need...
Government needs you to pay taxes's picture

All the criminals involved in this made an active choice to participate in illegal activity that undermined the credibility of the paper-based financial system while simultaneously defrauding hard working/diligent/saver non-1%ers.  Not only that, but also, they personally profited from their crime.  They must be held accountable.  These criminals weren't drafted into mandatory service.  They weren't forced to sleep in the cold without food and a gun in their hands.  No machine gun was lined up behind them in the event they chose NOT to participate in the crime.  No, these fuckers did it and got even richer because of it.  From the pleasant climate-controlled comfort of their world-class office buildings with the direct support of their criminal governments.  If I have my way, the gibbets are going to be full for a LOOOONG time.  

Wed, 11/12/2014 - 11:26 | 5440189 GetZeeGold
GetZeeGold's picture

 

 

They must be held accountable

 

That would be a great campaign slogan for Hillary 2016TM.

Wed, 11/12/2014 - 11:32 | 5440211 Atomizer
Atomizer's picture

Hillary Clinton hillbilly will never make 2016. She either has a health issue or gets caught in Benghazi scandal. 

Period. 

Wed, 11/12/2014 - 11:34 | 5440218 p00k1e
p00k1e's picture

Wait, that was the Republicans mantra from this past midterm.

The illegals will get booted.

Obamcare will be repealed.

Yada, yada…. 

Wed, 11/12/2014 - 11:41 | 5440249 GetZeeGold
GetZeeGold's picture

 

 

So what have we learned from this?

 

Anyone?

Wed, 11/12/2014 - 12:04 | 5440337 p00k1e
p00k1e's picture

I’m in Detroit.

Need any copper? 

Wed, 11/12/2014 - 11:25 | 5440182 nakki
nakki's picture

The entire system is rigged. When Glass-Steagall was revoked. What we have now should be know as "Class-Steal". If you work for the Banking Mafia there is no crime. Its just a "vig" you have to pay, so it appears that there are consequences. $500,000 is petty theft in this "new normal" world. Wouldn't be surprised if the Banks behind this didn't report it in the first place. Like the drug traffickers that give up a small shipment so the big one gets to its destination. They can say see we payed our fines and we're sorry we'll regulate ourselves better in the future. In the mean time they'll steal billions or trillions through the printing of fiat.

Wed, 11/12/2014 - 11:43 | 5440253 Atomizer
Atomizer's picture

Hook up with a drug trafficking cartel, ship products to United States of America. Then declare hooked on ObamaCare will wipe out your assets. 

Wed, 11/12/2014 - 11:36 | 5440226 vegas
vegas's picture

EASY PEEZEE when 1)you got Billions behind you, and 2) you know where all the orders and stops are, and 3) therefore you can "muscle" the market [short term] to your scheme. This shit has been going on since the 1970's when FX started in the modern era. Don't sit there and tell me anybody should be "shocked" by this.

 

www.traderzoo.mobi

Wed, 11/12/2014 - 11:58 | 5440314 wearef_ckedwith...
wearef_ckedwithnohope's picture

Is there some f*cking reason why financial industry criminals are not charged with crime instead of having their employer get miniscule fines relative to the profits made?  And for the criminal employees to be subject only to potential decreases in bonuses to be readily made up for by increases in base salary?

 

On another note, right off the interstate where I live in NH, there were about 50 political signs a couple of weeks ago.  One of them was hand-made and stated the following:   FREE JON CORZINE !!!    (oops).

The creater of this particular sign had a number of discussions with people regarding it.  The great majority of these individuals couldn't understand what it was conveying.  Basically saying:  I don't get it, who is Jon Corzine? 

IMO, this is representative of the typical American voter (not just in NH).  This is why we allow the Fed to run the econonomy through Monetary Policy while our "bought & paid for" Congress and profoundly disappointing hope & change president have abandoned their responsibility to enact any thoughtful fiscal policy.  Voters are too ill informed to formulate opinions about anything of importance because they are too otherwise occupied with nothing to realize what is going on all around them.

Wed, 11/12/2014 - 11:45 | 5440265 madbraz
madbraz's picture

they should do it like central banks and primary dealers probably do - over expensive dinners and then through algos reacting to one another.

Wed, 11/12/2014 - 11:52 | 5440292 SharkBit
SharkBit's picture

I wonder how these fucks would actually fair as "traders" if they were not operating on Inside Information.  Me thinks they would be just like the rest of us "traders" albeit they get the big fat bonuses because they have such brilliant minds.  Fucking joke the finance industry has become.  Jump you fuckers.

Wed, 11/12/2014 - 20:25 | 5442300 DipshitMiddleCl...
DipshitMiddleClassWhiteKid's picture

ive heard from guys who work at prop shops/hedge funds (who actually are skilled traders) say they've seen "succesful" bank traders get steam rolled when it came time to actually 'trade'

 

~DipshitmiddleclassWhitekid

 

 

Wed, 11/12/2014 - 12:03 | 5440328 SillySalesmanQu...
SillySalesmanQuestion's picture

" Now I know what the F means in your name, F. Ross Johnson."

Wed, 11/12/2014 - 12:42 | 5440520 Pseudonymous
Pseudonymous's picture

There is nothing to give value to a fiat currency except what people are willing to do in order to obtain it. If this kind of "work" is what earns you fiat currency, then fiat is going to be worth whatever this is worth.

Wed, 11/12/2014 - 13:13 | 5440663 Itch
Itch's picture

For the other 23 hour and 58 minutes, its still fine to rig the market - just dont manipulate it when important people have bets on. 

Wed, 11/12/2014 - 13:55 | 5440872 tedstr
tedstr's picture

Libor, FX, Munis, Prop research  is there anything these dont rig?  Is there any honest work going on in any of these firms?

 

Wed, 11/12/2014 - 20:25 | 5442293 DipshitMiddleCl...
DipshitMiddleClassWhiteKid's picture

translation, said trader found out where all the retail idiots where positioned and blew out all the stops

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