{"id":10386,"date":"2015-07-26T07:30:27","date_gmt":"2015-07-26T12:30:27","guid":{"rendered":"http:\/\/olduvai.ca\/?p=10386"},"modified":"2015-07-26T07:30:27","modified_gmt":"2015-07-26T12:30:27","slug":"banks-rig-treasury-market","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=10386","title":{"rendered":"Banks Rig Treasury Market"},"content":{"rendered":"<h3><strong><a href=\"http:\/\/www.washingtonsblog.com\/2015\/07\/banks-rig-treasury-market.html\" target=\"_blank\">Banks Rig Treasury Market<\/a><\/strong><\/h3>\n<p>Boston\u2019s public sector pension fund\u00a0<a title=\"accuses\" href=\"https:\/\/www.scribd.com\/doc\/272469388\/Treasury-Manipulation-Complaint\" target=\"_blank\">accuses<\/a>\u00a0all of the biggest US banks\u00a0 \u2013 the so-called \u201cprimary dealers\u201d which transact directly with the United States Treasury Department and \u201chave a special obligation to ensure the efficient function\u201d of the American treasury bond market \u2013 of colluding to manipulate the $12.5 trillion U.S. Treasury market.\u00a0 The complaint alleges:<\/p>\n<blockquote><p>Defendants employed a two-pronged scheme to manipulate the Treasury securities market. First,\u00a0<strong>Defendants used electronic chatrooms, instant messaging, and other electronic and telephonic methods to exchange confidential customer information, coordinate trading strategies, and increase the bid-ask spread in the when-issued market to inflate prices of Treasury securities they sold to the Class.\u00a0<\/strong>Second,\u00a0<strong>Defendants used the same means to rig the Treasury auction bidding process to deflate prices at which they bought Treasury securities to cover their pre-auction sales.<\/strong>\u00a0Recent reports confirm that traders at some of these primary dealers \u201ctalked with counterparts at other banks via online chatrooms\u201d and \u201cswapped gossip about clients\u2019 Treasury orders.<\/p>\n<p>By engaging in this unlawful conduct, Defendants maximized the spread not only for transactions in the when-issued market, but also between their buy (auction) price and sell (when-issued) price.<\/p>\n<p>***<\/p>\n<p>This conduct lined the pockets of Defendants while raising prices to investors trading Treasury securities in the when-issued market, investors trading Treasury security-based futures and options, and investors transacting in instruments benchmarked to the prices of Treasury securities determined at auction, including certain bonds and other asset- backed securities and interest rate swaps.<\/p>\n<p>Given the tight correlation between the Treasury securities prices in the spot market and futures markets,\u00a0<strong>Defendants\u2019 manipulation of the auction prices for Treasury securities also directly and proximately caused injury to individuals and entities that traded in Treasury futures and options on U.S. exchanges, including the Chicago Mercantile Exchange.<\/strong><\/p><\/blockquote>\n<p>High-frequency trading has also\u00a0<a title=\"long been used\" href=\"http:\/\/www.zerohedge.com\/news\/2015-03-12\/parasite-turns-parasite-hft-sues-other-hfts-egregious-manipulation-treasury-securiti\" target=\"_blank\">long been used<\/a>\u00a0to manipulate the treasury market.<\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Banks Rig Treasury Market Boston\u2019s public sector pension fund\u00a0accuses\u00a0all of the biggest US banks\u00a0 \u2013 the so-called \u201cprimary dealers\u201d which transact directly with the United States Treasury Department and \u201chave a special obligation to ensure the efficient function\u201d of the American treasury bond market \u2013 of colluding to manipulate the $12.5 trillion U.S. Treasury market.\u00a0 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[63,7534,6024,400,401,927,503,7533,2721,7532,5510],"class_list":["post-10386","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banks","tag-chicago-mercantile-exchange","tag-cme","tag-hft","tag-high-frequency-trading","tag-manipulation","tag-market-manipulation","tag-pension-funds","tag-us-treasuries","tag-us-treasury-market","tag-washingtons-blog"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10386","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10386"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10386\/revisions"}],"predecessor-version":[{"id":10387,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10386\/revisions\/10387"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10386"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10386"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10386"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}