Tag Archives: criminal networks

The Unrepentant Banker: How Banks Rig the Markets

Many of the big market-manipulation scandals over the past decade have much in common: huge fines for the investment banks, criminal charges for the traders and an embarrassing paper trail revealing precisely what bank employees got up to. Interest-rate traders who manipulated the London Interbank Offered Rate (LIBOR)… infamously called a chat room in which they discussed rigging exchange rates “the cartel”.

The case against JPMorgan Chase for manipulating precious-metals and Treasury markets has many of the usual features. On September 29th, 2020 it admitted to wrongdoing in relation to the actions of employees who, authorities claim, fraudulently rigged markets tens of thousands of times in 2008-16. The bank agreed to pay $920m to settle various probes by regulators and law enforcement… Some of the traders involved face criminal charges. If convicted, they are likely to spend time in jail.

The traders are alleged to have used “spoofing”, a ruse where a market-maker seeking to buy or sell an asset, like gold or a bond, places a series of phony orders on the opposite side of the market in order to confuse other market participants and move the price in his favor. A trader trying to sell gold, for instance, might place a series of buy orders, creating the illusion of demand. This dupes others into pushing prices higher, permitting the trader to sell at an elevated price. Once accomplished, the trader cancels his fake orders… According to prosecutors one JPMorgan trader described the tactic as “a little razzle-dazzle to juke the algos”. In the past two years Deutsche Bank, HSBC, Merrill Lynch and UBS have all paid penalties on spoofing charges…

Excerpt from Spoof proof: JPMorgan Chase faces a fine of $920m for market manipulation, Economist, Oct. 3, 2020

People Smuggling as a Business

People smugglers make about $35 billion a year worldwide and are driving the tragedy of migrants who die trying to cross the Mediterranean to reach Europe, the head of the International Organisation for Migration (IOM) told Reuters.  Increasing numbers of desperate migrants fleeing from Africa and elsewhere due to conflicts and humanitarian crises are dying as they attempt to reach Europe via Libya, coaxed to do so by smugglers as they wait in detention centres.

The death toll of people crossing the Mediterranean has reached 1,700 so far this year before the summer when many more make the journey, compared to 3,700 for all of 2015 and 5,000 last year, said IOM head William Lacy Swing.

“Let’s be careful because those are the people we know died, how many other bodies are submerged in the Mediterranean or buried in the sands of the Sahara?” he said in an interview on the sidelines of a conference on migration.

People smuggling now represents the third-largest business for international criminals, after gun and drug trafficking, he said.Libya is a major point of departure for migrants from Africa, where lawlessness is spreading six years after the fall of strongman Muammar Gaddafi and migrants say conditions at government-run migrant centres are terrible…

Excerpts from Migrant crisis worth $35 billion a year to people smugglers. Reuters, June 2, 2017