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Study of “misconduct patterns” and more cases

The FICC Markets Standards Board (FMSB) has issued the results of a “Behavioural Cluster Analysis” on misconduct patterns in the financial markets. The key document  can be found here, with other supporting documents found here.  The study has examined market misconduct cases going back to 1814, with some interesting  findings, which include:

  • The misconduct revolves around 25 patterns, which repeat and recur over the time period.
  • The patterns are geographically and jurisdictionally neutral.
  • The patterns occur over different asset classes, including many in energy and commodities.
  • The patterns occur independently of technology and market structure.

Case databases are also provided.

More cases
Following our last related post here, there has been a fine in Japan for the manipulation by layering of bond futures prices, of 218.37 million yen. A summary article can be found here on the Reuters web site. More detail can be found in  the Securities and Exchange Surveillance Commission announcement here, with a diagrammatic explanation of the abuse at the bottom of the page.

In the US, the CME has issued several penalty notice and bans/suspensions. This post on the DCM blog looks at these, the discusses how some of the penalties relate to disruptive trading, rather than the placing or orders with no intention of execution.


About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.


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