Three Class Actions Lawsuits filed against Merrill Lynch for Alleged Deceptive Trading Practices in Commodities
According to an article today in Financial Advisor IQ, multiple plaintiff lawyers filed at least three class action lawsuits after federal prosecutors secured a June 25 deal with Merrill Lynch Commodities, to pay $25 million to resolve their investigation into alleged deceptive trading practices.
Further, the Commodity Futures Trading Commission announced on the same day a separate settlement with the Merrill Lynch Commodities unit of Bank of America, requiring it to “pay an $11.5 million civil fine, cooperate with any related investigations, and remediate practices,” according to the article.
According to Financial Advisor IQ, which sites the settlement from the U.S. Department of Justice, two former Merrill Lynch commodities traders allegedly engaged in a multi-year scheme to mislead the market for precious metals futures contracts traded on the Commodity Exchange Inc. (COMEX).
Manipulating the market by creating the false impression of increased supply or demand, in order to induce other market participants to buy and to sell futures contracts, is known as “spoofing.”
The two traders, who have indictments pending against them for, allegedly placed fraudulent orders for precious metals futures contracts, which they intended to halt before execution, according to reports.
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Tags: Bank of America commodities, Merrill Lynch Commodities class action lawsuits, Merrill Lynch Commodities complaints, Merrill Lynch Commodities investigation, Merrill Lynch Commodities lawsuit, Merrill Lynch Commodities losses, spoofing lawsuits Last modified: July 29, 2019
