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Why Is The NY Attorney General Not Prosecuting The Real FX Spoofing Criminalgos
In a world where every market is rigged and manipulated - either by central banks, by algos, or by human actors eager to "get rich quick" - we doubt many will care that the New York Attorney General has finally figured that the FX market was also rigged by spoofing (something we have pointed out since 2013), and yet this latest development is worth pointing out.
The reason for that is not so much the companies which are named in this latest crackdown on widespread manipulation in the world's most important market (now that all central banks are engaged in currency warfare) but which are not.
According to Bloomberg, the NYAG is investigating possible manipulation in foreign-exchange trading, according to a person familiar with the matter, aiming more scrutiny at a market already tainted by scandals that have led to billions of dollars in fines. The new investigation of foreign-exchange options comes after several banks paid nearly $6 billion earlier this year for colluding to rig currencies. Only there they rigged FX using the oldest trick in the book: anonymous bandwagoning using chat rooms. This time the focus is on what Nav Sarao was blamed for doing when he "caused" the 2010 Flash Crash.
The investigation centers on brokers who may be placing fake orders, a technique sometimes called spoofing, according to the person. These practices are also referred to as ghosting, because they create the impression of activity that isn’t really there.
Who is implicated? According to Bloomberg, Schneiderman has sent subpoenas for records to interdealer brokers including TFS-ICAP, Tullett Prebon Plc, BGC Partners Inc. and GFI Group Inc.
Spokespeople for the brokers declined to comment. TFS-ICAP is an ICAP Plc joint venture, and BGC Partners owns GFI. Matt Mittenthal, a spokesman for Schneiderman, declined to comment.
The investigation, still in its early stages, is examining whether fake bids and offers in FX options were posted on the electronic trading platforms hosted by the interdealer brokers, in order to ramp up interest from options traders in largely illiquid emerging-market currencies, according to the person familiar with the investigation.
Sure enough the market reacted quickly and shares of ICAP dropped as much as 1.4 percent after the news broke. Tullett Prebon lost as much as 1.6 percent, and BGC slumped up to 3 percent.
But, as we said above, more interesting than who was named in this latest "investigation" is who wasn't - and while the "carbon-based" interdealer traders are looking at billions more in settlement charges and fines over the coming months, the real culprits of constant FX spoofing remain unnamed. We refer of course, to the algo-based "FX traders" of the Virtus, the Volants, the Citadels of the world... but especially the latter, whose role in executing NY Fed trades and curb sharp market moves lower, is well known and has been documented in the past.
We also refer to the central banks themselves who trade either directly out of their own account, as the SNB, or via trust banks such as the BOJ, or like the NY Fed which transacts in various pathways, but most notably by spoofing FX using HFT trading firms.
So why not go after the true FX riggers?
Because as noted above, if one really begins pursuing the spoofers, one will ultimately have to charge central banks for engaging in this criminal behavior. And that is unacceptable because with central bank credibility already on the way out, the last thing the monetary "authorities" need is for the general population to realize that the concept of price discovery has been dead since 2008.
And yet, if one really wants true price transparency and discovery to ever return to markets, instead of focusing on various anonymous small-time traders in aptly-named chat rooms, they should look at just one thing: the central banker meetings every other month on Sunday at 7pm in conference room E at the eighteenth floor of the BIS tower in Basel.
They won't.
First unofficial meeting of the BIS Board of Directors in Basel, April 1930.
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Pays to have friends in highhh placess...
Because his former firm Kirkpatrick and Lockhart, of which he was a partner, is one of New York's most bank connected law firms.
He doesn't want to be known as client 10.
Doesn't want to get "Spitzered".
Because the central banks make up the rules. If the central banks don't have a legal right, they then create the legislation and gov. legislatures pass it. The problem comes in when those who are not central bankers get in on the game. If you are not a central banker it is against the law to commit fraud without their approval.
Attorney General Schneiderman is a POS liar whose big concern is unsealing the Judge Mayer report from over 40 years ago dealing with the Attica prison uprising. His AAGs are the most incompetent do-nothings around, who primarily target minority businesses. You know, White Skin Protection. Worse, Schneiderman can't even talk well, so it sounds like everything he says is a lie. Wait . . .
Another game of ' find the low level patsy ' ....same as it ever was.
CITIZEN'S ARREST! ...... ITS THE ONLY WAY FORWARD! WHEN THE GOVERNMENT IS NO LONGER WILLING TO REPRESENT THE PEOPLE AND THE LAWS OF THIS LAND - IT IS UP THE TO CITIZEN'S TO DO THE WORK!
CITIZEN ARREST WARRARNT - FOR THE FOMC - INCLUDING , FISCHER, YELLEN, AND DUDLEY!
First you have to have evidence and a sworn affidavit about the crime you witnessed for probable cause. Then you have to find a real judge who will issue a warrant. If you see a crime and interfere with the criminal and arrest him/them and drag him/them to court or a police station you better be damn right with back up evidence or you could be held liable.
This is the way public law enforcement officers are supposed to do it. They usually don't do it and just arrest your ass for a government infraction. Unless you are part of the government, the enforcement officer could be liable for damages.
The Att. Gen. must have locked down a future career with a Algo trading firm
I would pay an extra dollar on every order if the same we're done for spoofers! If it cost them a buck an order then maybe they would'nt hit the markets with millions of unfillable orders each day.
Enforcing the Laws against the little peeples is their only concern.
Prosectuors offices are the minor leagues of major league politics.
To move up into the major leagues all you have to do is bury evidence, fool juries, selectively prosecute. and pretend it's not a popularity contest.
I live in the Empire State and I can give Zero Hedge bloggers my idea of why these criminals are never charged with violations of the New York penal code.
1. New York State government uses Wall Street as its private bank whenever Albany needs money to fill the State treasury to fund some liberal program (e.g., raising the wages of public employees to $15.00 per hour, etc.).
2. If the head of these hedge funds, commercial banks, etc. went to jail that would kill the "golden goose", that's why they're only charged with civil penalties and allowed to plea bargain, not go to trial. Bernie Madoff was sacrificed to give the public the illusion that Albany is tough on financial crime.
3. What the government is essentially doing is accepting "hush money" so Wall Street can continue engaging in financial dealings that are in many instances, illegal.
I got a dispatch from GATA about this article.
It turns out that it is LEGAL for the Government and Central Bankers to rig the damned markets.
That is the real scandal.
Forwarding to Tyler...