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Q:Why was Merrill Lynch Charged with Criminally Manipulating Precious Metals Markets?Back to the media page
Answer: On June 25, 2019, The U.S. Commodity Futures Trading Commission (CTFC) announced that Merrill Lynch Commodities (MLCI), was fined $25 million to resolve the government’s investigation into a multi-year scheme by MLCI traders, who mislead the market for precious metals futures contracts traded on the COMEX. Beginning in 2008 and continuing to 2014, MCLI admitted that precious metals traders employed by MCLI schemed to deceive market participants by injecting false information into the precious metals futures market. They did so by placing fraudulent orders for precious metals futures contracts, and at the time the traders placed their orders, they intended to cancel before execution. In doing so, the traders intended to manipulate the market by creating a false impression of increased supply or demand and to fraudulently induce other market participants to buy and to sell futures contracts at quantities, prices and times that may otherwise likely would not have done so. Over the above time-period, the traders placed thousands of fraudulent orders. The total agreement for MLCI to pay was the combined sum of $25 million in criminal fines and restitution and forfeiture of trading profits. Additionally, the NPA, MCLI and its parent company, Bank of America, have agreed to cooperate with ongoing investigations of individuals who violate the wire fraud statue, securities and commodities statue and anti-spoofing provision of the commodity exchange act. Also, MLCI and BAC have agreed to enhance their existing compliance program and internal controls. The COMEX also announced a separate settlement with MLCI in connection with related, parallel proceedings for a civil monetary penalty of $11.5 million, along with other remedial and cooperation obligations.
Here is a news released published by the USA Department of Justice
Here is a link to a story published by the Wall Street Journal