Month: December 2016

Burke, Johnson Leave BAML

Bob Burke, managing director, FICC futures, and Michael Johnson, director, FICC futures, have both left Bank of America Merrill Lynch (BAML) in New York, a spokesperson confirms. As of recently, Burke’s responsibilities included heading global OTC clearing and FX prime brokerage, overseeing agent clearing services for OTC derivatives for institutional clients.
Prior to this, Burke was co-head of the firm’s global futures and derivatives clearing services group. Burke also previously ran credit hedge fund sales for BAML. He has also worked in the firm’s private equity group, raising capital for LBO and venture capital funds, and started his career in the US municipal derivatives sales business.

And Another Thing…

The penultimate Accolade is upon us and again, when seeking to select the Analysis of the Year, there were plenty of contenders. Before we go through them I need to stress that all should be viewed through the prism of my trade of the year in the Crystal Ball feature in the January 2015 issue of Profit & Loss which managed to lose just the 10%!
If that sounds bad, at one stage it was actually almost 20% up – reason enough to reiterate the old adage of foreign exchange traders everywhere, “NEVER trade the Scandies”!

Australian Banks Admit Conduct Oversight Failure in FX Businesses

Two Australian banks, National Australia Bank and Commonwealth Bank of Australia, have each made a “benefit payment” of AUD 2.5 million after the local regulator, the Australian Securities and Investment Commission (ASIC) found they had inadequate controls to address risks relating to instances of inappropriate conduct in their offshore FX businesses.
ASIC says it identified attempts to manipulate FX fixes, front running and the inappropriate sharing of information by traders at CBA and NAB between 1 January 2008 and 30 June 2013.

Goldman Settles with CFTC Over ISDAfix Manipulation

Goldman Sachs has paid a $120 million fine after settling with the US Commodity Futures Trading Commission (CFTC) over accusations its traders attempted to manipulate the ISDAfix interest rate benchmark setting. Goldman neither admitted nor denied the charges in settling.
The CFTC issued an Order finding that, beginning in January 2007 and continuing through March 2012 Goldman attempted, by and through certain of its traders in New York, on many occasions to manipulate and made false reports concerning the US Dollar ISDAfix. It adds that Goldman’s “unlawful conduct” involved multiple traders, including the head of the bank’s interest rate products trading group in the US.

Prop Firm Fined for Spoofing

3Red Trading and its owner Igor Oystacher have been convicted of spoofing by a US District Court and fined $2.5 million.
The case was brought by the US Commodity Futures Trading Commission (CFTC) and Judge Amy St. Eve of the US District Court for the Northern District of Illinois entered a Consent Order of Permanent Injunction finding that the defendants engaged in a manipulative and deceptive spoofing scheme while trading at least five different futures contracts on four exchanges for more than two years.

FX Industry to Face Deadline Challenges in 2017

FX market participants face numerous challenges next year in adhering to regulatory deadlines, according to experts on a recent Profit & Loss webinar.

One of the more immediate regulatory deadlines that firms are currently preparing for is on March 1, 2017, when the new variation margin requirements for non-cleared derivatives come into force.

But as Gabriel Rosenberg, a partner at Davis Polk pointed out, there are a number of factors within these requirements that are making them difficult for firms to comply with, even in instances where they are already exchanging variation margin with their counterparties.

And Finally…

In such a historic year – for it has been that – it feels appropriate to have an Accolade dedicated to the shock of the year. I should point out this is a market shock – not the kind felt by much of the world as the US presidential election results unfolded.
In a year that had flash crashes, very large movements in specific currency pairs and plenty of “blink and you’ll miss it” moments, competition for the “What the…? Moment of the Year” is fierce.

Fraud with a Difference: Trade with Your Mum

A US District Court Judge has found that an employer effectively stole $300,000 from her employer by trading non-competitively on CME against an account held by her mother.
In deciding an action brought by the US Commodity Futures Trading Commission (CFTC), Judge Sara Ellis fined Yumen Li and Kering Capital – a firm established by her mother, $1.2 million, including a restitution of the $300,000.
The CFTC charged Li and Kering with fraud, fictitious sales, and non-competitive transactions in connection with a series of transactions engineered by Li on CME’s electronic trading platform.

CFTC’s Massad, Giancarlo to Address Swaps Conference Two Days Before Inauguration

Two days before Inauguration day, Timothy Massad, chairman of the US Commodity Futures Trading Commission (CFTC), and CFTC commissioner Christopher Giancarlo will be keynoting the seventh annual SEFCON VII conference, which has become the largest conference for the US swaps trading market.
The conference will be held in New York on January 18, 2017.
The event, which is being hosted by the Wholesale Markets Brokers’ Association Americas (WMBAA), will provide inside looks on the implementation of the Dodd-Frank Act, the implications of a Trump presidency on financial markets, what lies ahead for US financial market regulation and cross border implications, as well as such critical topics as the future of OTC market structure.