David Liew was a quick study. Less than a year into his metals-trading job at Deutsche Bank in Singapore, he joked with a colleague about their latest win.
“Tricks from the … master,” Liew typed in a chat after working with a colleague to move gold futures prices while Liew executed a trade. In the course of a year, Liew and his colleagues used fake orders to try to manipulate prices, an illegal practice called spoofing, more than 50 times.
After pleading guilty to fraud charges last week and agreeing to cooperate, Liew has become a prime government witness for U.S. prosecutors investigating whether traders at the world’s biggest banks conspired to manipulate prices in silver, gold, platinum and palladium. His chats with colleagues — part of an FBI affidavit filed in Chicago and placed under seal — provide a window into the investigation by the Justice Department, which began looking into such activities at a dozen of the biggest global banks two years ago.
The U.S. is also looking beyond precious-metals trading and planning more criminal spoofing charges against Wall Street traders, according to people familiar with the matter. Working with the Commodity Futures Trading Commission, prosecutors in the Justice Department’s criminal division in Washington have been developing spoofing cases across markets since the 2010 adoption of the Dodd-Frank financial law, which made the practice illegal.
This post was published at bloomberg
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