Manipulation, Fraud, Scam, Insider Trading etc.

[winston]

US accuses oil traders of 2008 manipulation

US authorities on Tuesday accused three companies linked to Norway-born Cypriot shipping and drilling tycoon John Fredriksen of manipulating oil trading on the NYMEX and ICE exchanges in 2008.

The Commodity Futures Trading Commission (CFTC) said it had filed a civil suit against three affiliated companies -- Parnon Energy Inc. of California, Arcadia Petroleum Ltd. of Britain, and Arcadia Energy (Suisse) SA of Switzerland -- for collaborating to manipulate oil prices in a scheme that netted them $50 million in profits.

Also named in the accusation were traders James Dyer of Australia and Nicholas Wildgoose of the United States.

All three of the accused companies are wholly owned subsidiaries of Farahead Holdings Ltd, with London-based Arcadia Petroleum the main operating firm in the trading ring.

Farahead is a part of the sprawling shipping, oil drilling and fish farming conglomerate of Fredriksen, the London-based Cypriot citizen who ranked number 72 on this year's Forbes billionaires list with a fortune of $10.7 billion.

Fredriksen was not named in the accusations.

The CFTC said that from late 2007 through April 2008, the three companies and the two traders sought to control already tight supplies of the benchmark West Texas Intermediate crude oil with physical purchases of millions of barrels "even though they did not have a commercial need for crude oil."

Tightening the supply of physical crude drove up their WTI futures and options contracts on the NYMEX and IntercontinentalExchange.

After taking profits in that way, the accused shorted WTI contracts and then quickly dumped their physical oil, pushing down the price and delivering more profits to the, the CFTC said.

"Pursuant to this manipulative cycle ... defendants realized profits from their WTI Derivatives trading that exceeded $50 million."

The scheme took place at a time when global oil prices were soaring toward a peak near $150 a barrel on a speculative frenzy that collapsed, driving price down to nearly one fifth of the high.

The CFTC said the traders reported to the unnamed chief executive and head trader of Arcadia Petroleum, who "performed the functions of CEO for Parnon and Arcadia Suisse."

It also said they halted the scheme when they discovered they were being investigated by the CFTC.

Source: AFP Global Edition

[millionairemind]

How come Goldman Sachs not involved in this lawsuit??

[iam802]

I think the key difference is probably GS did not trade physical oil.

[winston]

Propriety trader guilty of price manipulation By Shaffiq Alkhatib

SINGAPORE: A proprietary trader pleaded guilty on Monday to manipulating the price of CapitaMall warrants traded on the Singapore Exchange.

Forty-four-year-old Sim Tee Yang, who is from CIMB-GK Securities, admitted to four charges while eight remaining ones will be taken into consideration during sentencing.

Sim, who has been a proprietary trader since 1994, committed the offence between May and August 2005.

But in December 2005, the Commercial Affairs Department received information that Sim may have manipulated CapitaMall Trust units and CapitaMall warrants.

He had simultaneously traded with them even though he knew that the share price of one would be affected by the other.

The court heard that even though Sim lost nearly S$8,700 on the trading of CapitaMall Trust units, he made more than S$25,000 when he traded with CapitaMall warrants.

He netted a profit of more than S$16,000 in the process.

Sim can be jailed up to seven years for each charge, fined a maximum of S$250,000 or both.

Source: CNA

[winston]

Let's check out those short-sellers
Thursday, June 30, 2011

I indicated yesterday that we should be picking up Yurun (1068) shares instead of dropping them like a hot potato if the current rumor swirling about the company is nothing more than idle talk.

Its shares rebounded 6.8 percent to HK$20.70 at the end of the day.

If you bought some, keep them. In the absence of new developments, the counter can easily get back to the HK$25 level in the mid-term.

An absence of volatility is like still water to investors who like market movement. But if someone builds up a short position and then spreads a rumor, it is market manipulation. The Securities and Futures Commission should probe the short- selling in this counter.

When the Japanese stock market was booming 20-plus years ago, speculators would buy a certain counter, recommend it in faxes and then cash out.

There are plenty of tricks like these in the investment world. Regulators should investigate and protect investors' interest.

http://www.thestandard.com.hk/news_deta ... 10630&fc=7

[winston]

Ex-CIMB broker fined for share price manipulation by Arthur Sim

SINGAPORE - Benjamin Wong Chow Lin, formerly a trading representative and head of business development for corporate broking at CIMB Securities, has been fined S$50,000 by the Monetary Authority of Singapore (MAS) for share price manipulation under the Securities and Futures Act (SFA).

According to a statement released yesterday by the MAS, Wong had attempted to maintain or inflate the closing price of Singapore-listed Heng Long International (HLI).

On 39 days between Aug 1, 2008 and Feb 28, 2009, Wong bought one to three lots of HLI shares near the close of trading, with the intention of marking the closing price of HLI shares to exceed the last traded price.

As a result of his trades, HLI shares closed at between one and 15 bids, or between 1.8 per cent and 36.4 per cent above the preceding traded price.

According to the statement, Wong did not appear to have profited directly from his trades but he admitted that he intended to maintain or inflate the closing price of HLI shares to impress clients to whom he had promoted the stock during its initial public offering and who had subscribed to the placement shares through him.

Besides the fine, Wong is banned from acting as a trading representative for one year and from taking part in the management of any holder of a capital market services licence or any person exempt under section 99 (1) of the SFA in Singapore for two years.

The MAS enforcement is a civil penalty action that does not attract criminal sanctions.

http://www.todayonline.com/Business/EDC ... nipulation

[winston]

Pheim Asset, Tan Lose Bid to Overturn Singapore Stock Manipulation Ruling By Andrea Tan

Tan Chong Koay and Pheim Asset Management Sdn, ordered to pay S$250,000 ($207,000) each in Singapore’s first civil lawsuit for market manipulation, failed in their bid to overturn the ruling.

The Monetary Authority of Singapore, which sued Tan and his asset manager Pheim, said the fund manager intended to create a “false and misleading appearance” in the city’s stock market by buying shares of United Envirotech Ltd. (UENV) in the last three trading days of 2004.

The “pattern of trading was not consistent with either the actions of an investor who genuinely believed that UET shares were undervalued or those of a ‘contrarian’ investor,” a panel of three judges including Chief Justice Chan Sek Keong wrote in a 45-page ruling today. Reducing the penalties “would set back MAS’s efforts and objective to promote Singapore as a well- regulated and trusted fund management hub.”

Singapore’s central bank, which has tightened the rules for financial misconduct after the global credit crisis in 2008, has said it won’t tolerate “window dressing” and allow fund managers to think they can get away lightly.

Pheim bought almost 90 percent of the traded shares of United Envirotech from Dec. 29 to Dec. 31, 2004, according to the ruling. The shares climbed 17 percent over the three trading days, triggering bonuses of about S$50,000 and boosting the net value of Pheim’s accounts, allowing them to beat their benchmarks.

Denied Claims
Pheim started selling the shares in March 2005 and completely sold them by 2007, according to the ruling.

The Pheim Group, including its Singapore operations, manages about $1.8 billion.

Pheim and Tan, named one of five successful Singapore-based boutique fund managers by the Government of Singapore Investment Corp. in 2002, had denied the stock-rigging claims and said they wouldn’t have risked their livelihood and business. They had a “genuine commercial intent to buy the shares,” Vinodh Coomaraswamy, their lawyer had argued.

The authority was represented by Cavinder Bull.

The case is Tan Chong Koay v. Monetary Authority of Singapore, CA186/2010 in the Singapore Court of Appeal.

http://www.bloomberg.com/news/2011-07-2 ... uling.html

[winston]

How much did he made in the first place ? Making US$10m and paying a US$1m penalty is a no-brainer to some people ...

Trader gets $1 million penalty for metals manipulation by Christopher Doering

WASHINGTON (Reuters) - A former portfolio manager for Moore Capital Management agreed on Monday to pay the U.S. futures regulator $1 million to settle charges that he attempted to manipulate prices of palladium and platinum futures contracts on the New York Mercantile Exchange.

Christopher Louis Pia attempted to manipulate the settlement prices of palladium and platinum futures contracts from at least November 2007 until May 2008 while working for Moore Capital, the Commodity Futures Trading Commission said.

He had engaged in a trading practice known as "banging the close", the CFTC said.

The order bans Pia from trading CFTC-regulated products during the closing period of the markets and from trading CFTC-regulated products in platinum and palladium. It also requires him to distribute a copy of the regulator's order to current investors and to current and future employees.

"Christopher Pia is pleased to have settled with the CFTC in order to put this matter behind him. Pia Capital, his current firm, is committed to abiding by the CFTC Order and to maintaining the highest level of compliance," Pia Capital said in a statement.

A Moore Capital spokeswoman could not be reached immediately for comment. Moore Capital, one of the biggest hedge funds investing in commodities, managed around $15 billion as of June.

The act of "banging the close" occurs when a trader acquires a substantial position leading up to the closing period, and then offsets the position before the end of trading to try to manipulate closing prices.

In this case, Pia entered market-on-close buy orders that were executed in the last ten seconds of the closing period for both contracts in an attempt to exert upward pressure on the settlement prices of the futures contracts.

A year ago, the CFTC settled similar charges of attempted manipulation of platinum and palladium futures settlement against Moore Capital Management, Moore Capital Advisors, and Moore Advisors.

"As demonstrated by today's action, the Commission will not hesitate to impose significant sanctions on such traders," David Meister, the CFTC's enforcement chief, said in a statement.

Meister said in May that he would use his "bigger arsenal of weapons" to crack down on fraud and manipulation in the marketplace.

He said his group would keep cracking down on schemes that prey on retail investors -- until recently the hallmark of the agency's enforcement division -- but would also focus on investigating broader industry and over-the-counter fraud and manipulative schemes.

Earlier this month, the CFTC finalized a rule that will give it more muscle to crack down on market manipulation and fraud.

Source: Reuters US Online Report Business News

[winston]

Deutsche Bank employees indicted over stock manipulation

SEOUL, Aug. 21 (Yonhap) -- Four employees of Deutsche Bank AG and its South Korean brokerage unit have been indicted on charges of making massive profits from illegal stock market trading last year, prosecution officials said Sunday.

Three foreign employees, including a ranking official at the German bank's Hong Kong office, and one South Korea employee at Deutsche Securities Korea, are accused of pocketing 44.8 billion won (US$41.3 million) through the alleged market manipulation that triggered a sharp 2.7-percent plunge in the key local stock index KOSPI on Nov. 11. The South Korean brokerage unit was also indicted on the same charges.

The Seoul Central District Prosecutors' Office said it believes that employees at the German bank's overseas bureaus gave orders to the Seoul unit to place massive sell orders in the closing minutes of trading on that day, the expiry date of stock index options.

The sell orders were supposedly placed in order to bring handsome returns on their holdings of put options, which were structured to yield profits upon key index plunges.

Prosecutors said the indictment was based strictly on evidence since the foreign employees refused to answer a subpoena issued in April.

"This incident caused serious damage to the stability and transparency of South Korea's stock markets, which rank no. 1 in the world for option trade volumes," said Lee Seok-hwan, the chief prosecutor in charge of the case.

If the employees refuse to appear before court, prosecutors said they plan to request their extradition from Hong Kong authorities after seeking a detention warrant, and ask Interpol for its cooperation.

The sum allegedly gained through illegal trading was seized under a Seoul court order earlier in the year.


http://english.yonhapnews.co.kr/nationa ... 0315F.HTML

[winston]

Hedge fund Diamondback to pay $1 million to settle insider case

BOSTON (Reuters) - Hedge fund Diamondback Capital Management, which had been embroiled in the government's insider trading case, has agreed to pay back roughly $1 million to settle an insider trading case, according to a court filing released on Wednesday.

The Stamford, Connecticut-based firm, which has not been accused of any wrongdoing, made the money after a former portfolio manager illegally traded on a tip that Axcan Pharma would be acquired.

Anthony Scolaro, the former manager, pleaded guilty last year to criminal charges of having used inside information that was misappropriated by two lawyers at Ropes & Gray LLP to trade on behalf of Diamondback.

Scolaro settled his civil case with the SEC and agreed to pay back roughly $200,000.

Diamondback, which has roughly $4 billion in assets, was named as a defendant in the SEC's case.

Last year federal agents raided Diamondback and three other hedge funds as part of the government's far reaching probe into how fund managers use so-called expert network firms to put them in touch with industry experts to give them an edge in making their trades.

The other funds, Level Global, Loch Capital Management and Barai Capital have shut down or are in the process of shutting down.

Two years ago Diamondback settled charges with the SEC that it violated a short-selling rule four times between August 2005 and October 2005.

Source: Reuters US Online Report Business News