Day: January 9, 2017

CFTC Issues $11.6m Fine for FX Fraud Scheme

The US Commodity Futures Trading Commission (CFTC) has issued an $11.6 million fine in response to a FX fraud scheme.
The fine is a result of a complaint filed with the CFTC in May 2014, which alleged that EJS Capital Management and its management Alex Ekdeshman and Edward Servider, engaged in a fraudulent off-exchange foreign currency scheme.
The orders issued by the US District Court for the Southern District of New York find that between April 2013 and May 2014, EJS, Ekdeshman, and Servider solicited and accepted over $2 million from approximately 112 members of the general public to trade FX, and misappropriated most of the customer funds for their own personal and business expenses.

DTCC Announces Partners for New DLT Project

The Depository Trust & Clearing Corporation (DTCC) has selected IBM, in partnership with Axoni and R3, to provide a distributed ledger technology (DLT) framework for derivatives post-trade lifecycle events.

The firms will work collaboratively to re-platform DTCC’s Trade Information Warehouse (TIW), building a derivatives distributed ledger solution for post-trade processing based on existing TIW capabilities and interfaces with technology providers and market participants.

The TIW service currently automates the record keeping, lifecycle events, and payment management for more than $11 trillion of cleared and bilateral credit derivatives.

Positive December Can’t Save CTA 2016 Results

Data from Societe Generale Prime Services (SGPS) showed an uptick in CTA performance in December 2016, although its flagship index closed the year in negative territory for the first time since 2012.

All SG CTA indices posted positive returns in the last month of 2016, at the end of an otherwise difficult quarter. The highest performing index last month was the SG Trend Indicator, which was up 4.07% in December.

However, the flagship SG CTA Index closed the year slightly negative -2.86% and the SG Trend Index was at -6.19% for the year.

And Finally…

The last week has seen plenty of activity concerning conduct-related issues. We have had the first trader plead guilty to collusion and manipulation, a group of banks have had their fines for the same misconduct ratified and a trader has – rarely – lost an unfair dismissal case. As the lawyers continue to pick over the carcass of the conduct issue, the industry needs to focus on renewal and central to this is the establishment of a proportional sense of realism – both on the part of individuals and their employers.

LCH Handles Record Volumes in 2016

LCH is seeing the benefit of the push towards central clearing of derivatives, the clearinghouse announcing its SwapClear service cleared record volumes of interest rate derivatives in 2016.
LCH says it processed over $665 trillion in notional over the course of the year, representing an annual increase of 25%. “Both members and their clients increased their flows through LCH, with the buy side clearing a record $139 trillion in notional at SwapClear,” the firm says. “These volumes were driven by customers clearing new products, such as inflation swaps, as well the continuing effects of regulatory change.”

Second Barclays Trader Loses Unfair Dismissal Case

Mark Clark has become the second former Barclays FX trader to lose a claim for unfair dismissal in a UK employment tribunal.
According to a report by Bloomberg News Clark’s claim was dismissed by Judge George Foxwell at the East London Employment Tribunal.
During the trial, Clark claimed he was “thrown to the wolves” and fired, whilst senior managers were allowed to retire with reputation intact. This represents the second successful trial defence by Barclays who also defeated a claim last year.

Judge Formalises FX Fines for Banks

A US District Court judge has ratified fines against five major banks following their guilty pleas last year over currency market manipulation charges.
US District Judge Stefan Underhill in Bridgeport Connecticut agreed fines for Citi of $925 billion, Barclays $650 million, JP Morgan $550 million, Royal Bank of Scotland $395 million and UBS $203 million after the banks pleaded guilty to FX market abuse in mid-2015. The fines were recommended by the US government and accepted by Judge Underhill last week.