UBS Is About To Blow The Cover On A Massive Gold-Rigging Scandal

Tyler Durden's picture




 

With countless settlements documenting the rigging of every single asset class, it was only a matter of time before the regulators - some 10 years behind the curve as usual - finally cracked down on gold manipulation as well, even though as we have shown in the past, central banks in general and the Fed in particular are among the biggest gold manipulators.

That said, we are confident by now nobody will be surprised that there was manipulation going on in the gold casino. In fact, ever since Germany's Bafin launched a probe into Deutsche Bank for gold and silver manipulation, it has been very clear that the only question is how many banks will end up paying billions to settle the rigging of the gold market (with nobody going to prison as usual, of course).

Earlier today, we learned that the Swiss competition watchdog just became the latest to enjoin the ongoing gold manipulation probe when as Reuters reported, it launched an investigation into possible collusion in the precious metals market by several major banks, it said on Monday, the latest in a string of probes into gold, silver, platinum and palladium pricing.

Here are the details that should come as a surprise to nobody:

Global precious metals trading has been under regulatory scrutiny since December 2013, when German banking regulator Bafin demanded documents from Deutsche Bank under an inquiry into suspected manipulation of gold and silver benchmarks by banks. Even though the market has moved to reform the process of deciding on its price benchmarks, accusations of manipulation have refused to go away.

 

Switzerland's WEKO said its investigation, the result of a preliminary probe, was looking at whether UBS, Julius Baer, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui conspired to set bid/ask spreads.

 

"It (WEKO) has indications that possible prohibited competitive agreements in the trading of precious metals were agreed among the banks mentioned," WEKO said in a statement.

Don't hold your breath though: "A WEKO spokesman said the investigation would likely conclude in either 2016 or 2017, adding that the banks were suspected of violating Swiss corporate rules." Those, and virtually all other market rules.

The good news is that unlike Bart Chilton's charade "inquiry" into silver manipulation when after years of "probing" the CFTC found "nothing", at least the Swiss will find proof of rigging for the simple reason that it is there.

he banks face financial penalties if WEKO finds them guilty of wrongdoing, the spokesman said, though he declined to comment on the size of any possible fine.

No please, anything but "financial penalties" for rigging the gold market.

Aside from regulatory probes, a number of lawsuits have also been filed in U.S. courts alleging a conspiracy to manipulate precious metals prices.

 

Commenting on the WEKO probe, a Julius Baer spokesman said the bank was cooperating with authorities.

 

In a statement, Deutsche Bank said it was cooperating with requests for information from "certain regulatory authorities" over precious metal benchmarks but declined to comment further.

 

Representatives for UBS, Barclays, Morgan Stanley and HSBC declined to comment. Mitsui was not immediately available for comment.

Some so-called experts promptly scrambled to talk down the upcoming proof that so-called "paranoid" gold bugs have been right all along:

The impact of the probes on wider precious metals trading was likely to be muted, according to Brian Lucey, professor of finance at the School of Business, Trinity College Dublin.

 

"The question is not if individuals, or groups of individuals are collaborating to rig the game for themselves, the question is if this has any material effect," he said. "I'm not convinced collusive behaviour will have a meaningful effect micro-economically to the structure of gold trading around the world."

Oh so the question is not if traders and banks made billions in illegal profits by rigging yet another market, but "if this has any material effect." Give this man another distinguished financial professorship title: with observations like that what can one say but... "Keynesian genius."

* * *

However, as we said above, none of the above, and certainly not the idiotic "finance professor" statements, will come as any surprise to anyone.

What will, however, is that unlike previous gold probe cases, this one will actually have consequences.

How do we know?

Because just like in LIBOR-gate, just like in FX-gate, it is the biggest rat of all, Swiss megabank UBS, that is about to turn on its former criminal peers.

As Bloomberg reported earlier "UBS was granted conditional leniency in Swiss antitrust probe of possible manipulation of precious metal prices, a person with knowledge of the matter said."

Bloomberg adds that the "bank may face lower fine than six other banks and financial firms suspected in probe or may avoid penalty altogether, person says."

Why would UBS do this? The same reason UBS did so on at least on two prior occasions: the regulators have definitive proof it is involved, and gave it the option to turn evidence and to rat out its cartel peers, or face even more massive financial penalties.

UBS promptly chose the former, and took the opportunity to minimize yet another key civil (and criminal) market manipulation charge against it, especially after it was already branded a "criminal recidivist" between Libor, FX and, of course, the tax evasion scandal: one more manipulation scandal and the bank could well lose its license to operate in NYC.

Which simply means that now the official countdown on the announcement of what will be revealed as the biggest gold-manipulation and rigging scandal in history, has begun.

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Mon, 09/28/2015 - 12:23 | 6602150 Temporalist
Temporalist's picture

Ha!  There is no manipulation you tinfoil Zhers!  Go back to your fringe conspiracies!

Mon, 09/28/2015 - 12:25 | 6602158 arbwhore
arbwhore's picture

You forgot to mention Mom's basement. Amateur.

Mon, 09/28/2015 - 12:25 | 6602165 kliguy38
kliguy38's picture

Bullshit....."nobody gets outta here alive"

Mon, 09/28/2015 - 12:26 | 6602181 SheepRevolution
SheepRevolution's picture

I bet you the price of gold will go down on these news...

Mon, 09/28/2015 - 12:29 | 6602197 arbwhore
arbwhore's picture

Slammed like a $2 basketball in the Projects.

Mon, 09/28/2015 - 12:40 | 6602238 nope-1004
nope-1004's picture

The Fed, through its member banks, controls everything it can, ESPECIALLY gold and silver, as those are the barometer of confidence for the reserve currency.

Whether or not UBS rats someone else out does not hide the fact that these fiat whores manipulating perception cannot, and will never be able to, print physical metals.  Bankers cannot control nature, and nature has a way of coming back into balance.

They want you to hold USD, bonds, and equities.  Doing so enables them to be the counterparty who ultimately controls your destiny, so think through your options.

Mon, 09/28/2015 - 12:44 | 6602277 Pinto Currency
Pinto Currency's picture

 

The rig is the LBMA itself that currently trades more than 170M oz of 'unallocated' gold oz in the spot market each day.

http://www.safehaven.com/article/36534/lbma-data-points-to-gold-and-silver-default

Mon, 09/28/2015 - 12:53 | 6602327 BaBaBouy
BaBaBouy's picture

Theze Bytchezzz OWE BigTime For The PM's & Miners' MEGA-LOSES...........

Mon, 09/28/2015 - 13:06 | 6602381 SoilMyselfRotten
SoilMyselfRotten's picture

Don't hold your breath though: "A WEKO spokesman said the investigation would likely conclude in either 2016 or 2017

 

And THEN conclude that agents acting on behalf of govts. are NOT manipulating the price, got it. We've been down this gold and silver scandal road before, next please.

Mon, 09/28/2015 - 13:07 | 6602396 Pairadimes
Pairadimes's picture

Proving, once again, that there is no honor among thieves.

Mon, 09/28/2015 - 13:14 | 6602427 Cliff Claven Cheers
Cliff Claven Cheers's picture

DOJ and SEC:

cuckolded

  1. (of a law enforcement agency or employee) make (another criminal ie. Bank) a cuckold by having a sexual relationship with his wife.

Sounds kinda like a Cuckservative like Boner or Mocconnel.

All stand around with their hand in their pants furiously beating there meat whilst their wives or countries get fucked and they get off on it.

 

 

Mon, 09/28/2015 - 13:17 | 6602443 redpill
redpill's picture

Undeterred

By

Scruples

Mon, 09/28/2015 - 13:21 | 6602457 Manthong
Manthong's picture

“the bank could well lose its license to operate in NYC.”

Huh? So you’re going to kick a successful whore out of the brothel?  

I don’t think the Fed and BIS Madams would allow that.

 

Mon, 09/28/2015 - 14:39 | 6602861 SuperRay
SuperRay's picture

Send just one of these motherfuckers to jail and we'll see really quickly just how massive the rigging is. We need to sue the regulators for malfeasance.

Mon, 09/28/2015 - 14:45 | 6602890 Fish Gone Bad
Fish Gone Bad's picture

Honor amongst thieves?

Mon, 09/28/2015 - 15:05 | 6602956 knukles
knukles's picture

Who the fuck cares?  How do I get my money back is what I wanna know! 

Mon, 09/28/2015 - 19:50 | 6604517 philipat
philipat's picture

Of course, the far greater part of the mainipulation is orchestrated by The Fed and BIS on COMEX through their BB Agents dumping naked paper shorts into the market, usually on Globex at the least liquid times of day. Like 3AM - yesterday provides a perfect example.

The CFTF investigation did NOT state there was no manipulation but that they didn't find anything "Actionable". For details, see above.

Mon, 09/28/2015 - 20:35 | 6604714 turtle
turtle's picture

Right. Daily settelment price manipulations pale in significance to the long term price suppression via the massive unallocated and paper gold supply fraud.

Tue, 09/29/2015 - 00:11 | 6605374 Four chan
Four chan's picture

ubs isnt going to do shit. you heard it here first.

Tue, 09/29/2015 - 00:44 | 6605414 old naughty
old naughty's picture

"who the fuck cares..."

if 98.9% do not (0.1% ZHers)?

All jokers in the master's court, playing out kabuki, as scripted.

All veying for the master's favors, while heading for the abyss.

Fool's foley.

 

 

Tue, 09/29/2015 - 02:15 | 6605514 Proofreder
Proofreder's picture

Life is sometimes a Lemon ...

https://www.youtube.com/watch?v=BF1wVv8OnfE

I Want My Money Back  (Meatloaf - '93 recording)

Mon, 09/28/2015 - 22:32 | 6605142 PlayMoney
PlayMoney's picture

BO's DOJ refuses to prosecute any of them. They have signed "no prosecute" agreements before all of the previous fines.  

Tue, 09/29/2015 - 06:56 | 6605697 HardAssets
HardAssets's picture

SuperRay : . . " We need to sue the regulators for malfeasance. "

In their "courts" ?

The game is rigged, son. Completely and criminally rigged from top to bottom. And a lot of your neighbors probably work for the system (likely in some small capacity) or rely on it for a check. So that's why the whole thing is inevitably gonna crash & leave nothing but a pile of rubble.

Mon, 09/28/2015 - 16:15 | 6603441 PTR
PTR's picture

Perhaps there is a bus missing the proverbial person to be thrown underneath.

 

Or everyone just refuses to draw straws as this week's scapegoat.

Mon, 09/28/2015 - 13:14 | 6602430 SafelyGraze
SafelyGraze's picture

gold $42/oz!

Mon, 09/28/2015 - 13:37 | 6602553 Montani Semper ...
Montani Semper Liberi's picture

 Cheapest I could find was $250/oz.

 Stock up!

 http://www.alibaba.com/product-detail/1-oz-22k-American-gold-eagle_13189...

Mon, 09/28/2015 - 14:33 | 6602836 SafelyGraze
SafelyGraze's picture

the 42 gold is found here

http://www.federalreserve.gov/Releases/bulletin/1208assets.htm#fn1

"Gold stock is valued at $42.22 per fine troy ounce"

they should trade it for securities to expand their balance sheet.


Mon, 09/28/2015 - 13:50 | 6602609 undertow1141
undertow1141's picture

With a 500% premium on actual physical metal.

Mon, 09/28/2015 - 15:13 | 6602989 SilverRhino
SilverRhino's picture

Picked up 50 oz of silver today .... happy and sitting pretty 

Mon, 09/28/2015 - 13:59 | 6602674 Urban Redneck
Urban Redneck's picture

It's not quite that simple... WEKO has specific responsibilities and the SNB marks its gold to market every month, unlike certain other CBs in the G10 club.  Back in April WEKO said it would wrap up the LIBOR/TIBOR investigation later this year.  That is the litmus test.   CB's care far more about LIBOR than they do about the gold price, which is why they looked the other way doing the last crisis when banks weren't engaging in interbank lending (for all practical purposes) but LIEBOR didn't explode...

Mon, 09/28/2015 - 13:05 | 6602384 Divine Wind
Divine Wind's picture

 

 

 

It is my prediction that we will see 1-2 UBS affiliated commodities traders meet untimely deaths.

After this, there will be no one willing to spill the beans.

There is far too much money in play across far too many global entities for this to completely unwind in this fashion.

It will take a major market event for the truth to be revealed.

Mon, 09/28/2015 - 13:39 | 6602560 Ms No
Ms No's picture

Or worse, any public uncovering of gold manipulation will be used to make the case that all people who own gold are criminals and treasonous scumbags. 

Mon, 09/28/2015 - 15:06 | 6602961 Herd Redirectio...
Herd Redirection Committee's picture

Like the old joke, that the first thing a new President sees is footage of the JFK assassination, which curiously looks like it was taken from the "Grassy Knoll", and after the video is over, the President is asked, "Any questions?"

Mon, 09/28/2015 - 13:06 | 6602388 Stuck on Zero
Stuck on Zero's picture

Hang the bankers in such a way that there will be no "material effect."

 

Mon, 09/28/2015 - 13:54 | 6602632 tenpanhandle
tenpanhandle's picture

Upside down with their head in a bucket.  Slowly fill bucket by dripping water into it.  Banker ultimately die but not by hanging.

Mon, 09/28/2015 - 13:30 | 6602524 ThroxxOfVron
ThroxxOfVron's picture

"UBS promptly chose the former, and took the opportunity to minimize yet another key civil (and criminal) market manipulation charge against it, especially after it was already branded a "criminal recidivist" between Libor, FX and, of course, the tax evasion scandal: one more manipulation scandal and the bank could well lose its license to operate in NYC. "

 

EXACTLY how many times are these scumbags ALLOWED to steal and cheat and defraud their customers in ever single manner possible in every single trade offered before the government finally prosecutes and imprisons the guilty PERSONS and compensates those stolen from and cheated and defrauded?

What is the fucking point of having a huge govenment regulatory bureaucracy if it does practically nothing to stop blatant unrepentant recidivist criminals from plundering literally trillions from the Citizenry?

Mon, 09/28/2015 - 13:57 | 6602652 Publicus_Reanimated
Publicus_Reanimated's picture

ToV, you are confused.  It is precisely the purpose of "having a huge govenment regulatory bureaucracy"

-- to allow blatant unrepentant recidivist criminals to plunder trillions from the Citizenry.  The more your business is regulated by the government, the more you become an arm of the government.  Tyler points out UBS has rolled over again and again.  Hmmmm... Price of being allowed to do business as an arm of the government.

Mon, 09/28/2015 - 15:42 | 6603122 daveO
daveO's picture

Yes. "A WEKO spokesman said the investigation would likely conclude in either 2016 or 2017..."

Since this was Reuters (bankster media), it could be a signal that the gold train will leave the station around, or soon after, election time. 

Mon, 09/28/2015 - 17:49 | 6604018 logicalman
logicalman's picture

Who'd keep the revolving door in motion if there wasn't a huge government regulatory bureacracy?

 

Mon, 09/28/2015 - 14:04 | 6602699 To Hell In A Ha...
To Hell In A Handbasket's picture

"One more manipulation scandal and the bank could well lose its license to operate in NYC"

 

I didn't know it was April Fool's day already? Jokes aside, the business model for Wall Street banks, includes fraud, market manipulation and price rigging. By these criteria UBS is a model company and banning them would mean a ban for every other bank. I wish UBS were banned, but nothing of the sort will happen and if the U.S was deranged enough to ban UBS, Europe would retaliate; bringing financial armageddon sooner than planned. 

 

Mon, 09/28/2015 - 12:47 | 6602278 Bay of Pigs
Bay of Pigs's picture

You got that right. Stocks, bonds and RE are all in FED engineered bubbles. Since 2008, the FED itself has become the bad bank by purchasing trillions of toxic assets, most notably the MBS’s that would have brought down most of the major Wall Street banks and other foreign banks as well. Today, they cannot exit their bloated balance sheet because most of those supposed “assets” are indeed worthless liabilities. They can’t normalize rates either (due to massive debt loads), so they really have no other options but to continue QE and to print. That means debasement of the USD, a loss of purchasing power and more inflation.

Mon, 09/28/2015 - 15:20 | 6603025 messymerry
messymerry's picture

Dear Pay of Bigs, (sorry I'm lysdexic)

You couldn't be more right.  Effectively, when the gig is up, they will all tumble simultaneously.

;-D 

Mon, 09/28/2015 - 13:06 | 6602391 jaxville
jaxville's picture

  The main goal of the manipulators was to create a counterintuitive set of pricing to keep public interest at bay.  I agree that the financial authorities want people holding stocks, bonds and other products within the financial sector.  The biggest goal is to keep confidence in the credit based currencies.  After all ....credit based currency is the foundation upon which all power of the establishment rests.

  Once confidence wanes in fiat, interest rates must rise appreciably to contain a total flight into alternative assets.  The economic cataclysm that would result could undermine the globalist agenda for a century or more.

   The stakes are huge for the paper pushers.  They may very well find themselves at the end of a rope if they fail to contain a surge in both demand and pricing in gold.

Mon, 09/28/2015 - 14:27 | 6602812 Vlad the Inhaler
Vlad the Inhaler's picture

They want you to hold USD, bonds, and equities.  And when you don't, first they'll manipulate the price, but eventually they'll take away the freedom to do otherwise.  The house always wins!

Mon, 09/28/2015 - 12:29 | 6602199 Syrin
Syrin's picture

I look forward to no one being punished

Mon, 09/28/2015 - 13:27 | 6602514 SHEEPFUKKER
SHEEPFUKKER's picture

I long for the old days when bankers were taking base jumping lessons from 30th floor windows. 

Mon, 09/28/2015 - 23:04 | 6605250 Rusty Shorts
Rusty Shorts's picture

 - No good deed shall go unpunished

Mon, 09/28/2015 - 12:29 | 6602200 highandwired
highandwired's picture

At freefall speed, just like building 7

Mon, 09/28/2015 - 12:36 | 6602236 KnuckleDragger-X
KnuckleDragger-X's picture

JPM isn't on the list, of course. We talk about GS, but JPM is in a whole 'nother league.......

Mon, 09/28/2015 - 14:33 | 6602835 83_vf_1100_c
83_vf_1100_c's picture

Shhep, -1 for the avatar.

Do NOT follow this link or you will be banned from the site!