New York Opens Probe Into Currency Manipulation
November 23 2015 - 12:10PM
Dow Jones News
The New York Attorney General has opened an investigation into
possible manipulation of options contracts tied to currencies of
developing nations, according to a person familiar with the
matter.
The regulator filed subpoenas last week to four brokers that
operate platforms for trading the contracts: Tullett Prebon PLC,
BGC Partners Inc., GFI Group Inc. and TFS-ICAP Ltd., the person
said. The investigation was started after the attorney general's
office received a tip and is still at a preliminary stage, the
person said.
The inquiries center on the alleged use of large bids or offers
by firms to bluff others into buying options contracts at
artificially low or high prices, the person said. Options on
emerging-markets currencies are traded less than those of major
currencies, which make them more responsive to big orders.
Investigators are also probing whether some trading activity was
designed to trick other traders into believing a particular
contract had more volume than it truly had, the person said.
The office's Criminal Enforcement and Financial Crimes Bureau is
leading the investigation. Representatives for the brokers who were
sent subpoenas declined to comment.
Spoofing has become a major area of enforcement action in
markets for stocks, bonds and futures. Michael Coscia, a New
Jersey-based trader, in November was found guilty of criminal fraud
charges for spoofing the futures market. He is planning to
appeal.
The investigation was reported earlier by Bloomberg News.
Write to Bradley Hope at bradley.hope@wsj.com
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(END) Dow Jones Newswires
November 23, 2015 12:55 ET (17:55 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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