Deutsche Bank, UBS and HSBC will pay a combined $46.6 million to settle CFTC charges that the three banks engaged in spoofing, or entering phony trade orders, to manipulate the price of precious metals futures contracts.
Deutsche Bank and its Deutsche Bank Securities trading business will pay $30 million in civil penalties; UBS, $15 million; and HSBC Securities (USA), HSBC's U.S. trading unit, $1.6 million, the Commodity Futures Trading Commission said in a news release Monday. In addition, six individual traders will face federal charges of trade manipulation, the CFTC said.
The three banks and the traders were accused of manipulating the price of precious metals futures contracts traded on commodity exchanges through a variety of manual spoofing techniques from 2008 to at least 2013, the CFTC said. The agency highlighted the cooperation of HSBC in the investigation, which led to the firm's reduced penalty.
Spoofing is outlawed under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
In January 2017, Citigroup Global Markets paid the CFTC $25 million to settle charges it engaged in spoofing by placing orders to trade U.S. Treasury futures and then canceling them before execution.
Spokesmen at UBS and HSBC said their companies were "pleased" that the matter was resolved.
A UBS spokesman also said, "UBS self-reported this alleged conduct to the CFTC, cooperated fully in the investigation, and has long since remediated the conduct."
A Deutsche Bank spokesman said the firm has cooperated on the investigation and has "enhanced controls and surveillance" over its trading operations.