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The Morning Risk Report: Two Ex-Bank of America Traders Accused of Spoofing Found Guilty
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Bank of America agreed in 2019 to pay $25 million to settle criminal and civil investigations over its traders’ conduct. PHOTO: JEENAH MOON/BLOOMBERG NEWS
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Two former Bank of America Corp. traders were convicted Wednesday of rigging precious-metals prices by using an aggressive tactic known as spoofing, the latest win for prosecutors in a yearslong effort to crack down on the practice.
A federal jury found Edward Bases and John Pacilio guilty of wire fraud and conspiracy charges after a two-week criminal trial in Chicago. The proceeding was a test of prosecutors’ efforts to punish spoofing activity that predated a law defining the tactic and making it illegal.
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Prosecutors argued that trading by Messrs. Bases and Pacilio on futures exchanges operated by CME Group Inc. was deceptive, allowing the government to charge the conduct as fraud. Lawyers for the defendants argued that their style of trading was allowed before the 2010 Dodd-Frank financial overhaul law prohibited spoofing.
Spoofing involves sending deceptive orders that can mislead traders into thinking supply and demand have changed, according to regulators and prosecutors. The mirage, which some traders and attorneys argue is lawful bluffing, can move prices in a direction desired by the spoofer, while causing their counterparties to lose money.
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The Financial Services Agency headquarters in Tokyo. The agency is planning a new anti-money-laundering system for the financial industry. PHOTO: AKIO KON/BLOOMBERG NEWS
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Japan’s top financial regulator said his planned platform to combat money laundering could include cryptocurrency dealers, which he said have the same obligation as traditional financial institutions to make sure they don’t deal with criminals.
The Financial Services Agency has said it is planning to create a common industrywide system that financial firms could use to judge whether their clients might be terrorists and whether client accounts are at risk of being used for money laundering.
“In the sense that they are prohibited to deal with those subject to sanctions, cryptocurrency dealers are the same as banks,” said FSA chief Junichi Nakajima in an interview with The Wall Street Journal.
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Former Theranos Inc. patients will be allowed to testify at the criminal fraud trial of the defunct blood-testing startup’s founder, Elizabeth Holmes, a federal judge ruled Wednesday.
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The Biden administration’s latest eviction moratorium is set to face an immediate and possibly fast-moving legal challenge that could present high hurdles for the White House.
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Mexico’s government is suing a group of U.S.-based weapons manufacturers in U.S. federal court, arguing that the companies actively facilitate the trafficking of guns to Mexican drug cartels through their negligence.
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Lawyers for former President Donald Trump asked a federal judge to block the release of his tax returns to Congress, saying Democratic lawmakers have no legitimate purpose in seeking them and are trying to score political points by embarrassing Mr. Trump.
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Outside the New York Stock Exchange this summer. Companies have begun to impose vaccine mandates, mostly on white-collar workers returning to offices. PHOTO: MICHAEL NAGLE/BLOOMBERG NEWS
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Business leaders broadly agree they need to get more workers vaccinated to keep the U.S. economy humming in the face of the fast-spreading Delta variant.
But they’re split over how best to do that. Some are dangling bigger bonuses or other incentives to cajole employees into getting the Covid-19 vaccine. Others have started requiring workers get the shot.
In recent days, companies from Arkansas-based Walmart Inc. to Microsoft Corp. in Seattle have imposed vaccine mandates mostly on white-collar workers returning to offices. Meatpacker Tyson Foods Inc. on Tuesday took a harder line, saying all its workers must get the vaccine by Nov. 1.
Both strategies come with risks for employers, their workers and their customers, and both could shape the course of the pandemic.
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Southwest is offering leisure travelers deeply discounted tickets for this fall while restoring some business routes. PHOTO: PAUL HENNESSY/ZUMA PRESS
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Airlines are redrawing their route maps, betting that business travelers who have largely stayed put in the past year will return despite fresh worries about the highly infectious Delta variant of Covid-19 spreading in the U.S.
Delta Air Lines Inc. is adding back flights this fall in business centers such as New York and Boston, while cutting back on flying many of the vacation routes that became popular over the summer.
“We’re pivoting our capacity to now supplying more business seats,” said Joe Esposito, Delta’s senior vice president of network planning.
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The NYU Ad Observatory recruited thousands of volunteers. PHOTO: ERIK MCGREGOR/ZUMA PRESS
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Facebook Inc. cut off a New York University research project’s accounts and access to the platform, effectively shutting down a study of the social-media giant’s targeting of political ads.
The NYU Ad Observatory, launched last September by the university’s engineering school, recruited more than 6,500 volunteers to use a special browser extension to collect data about the political ads Facebook shows them. Soon after, Facebook, which hadn’t given permission for the project, demanded the researchers cease collecting the data.
On Tuesday, Facebook disabled the accounts, apps, Facebook pages and platform access associated with the project and its operators.
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