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Market News Shocked the world! Negative oil prices revealed that more insiders made 4.5 billion in one day chat details exposed!
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Shocked the world! Negative oil prices revealed that more insiders made 4.5 billion in one day chat details exposed!
2022-04-18 10:00:07
The progress of two overseas financial manipulation cases is attracting great attention in the global financial sector.
The first is that the 2020 U.S. WTI negative oil price incident has revealed more inside stories. Recently, a group of British traders will be tried in the United States for allegedly manipulating crude oil market prices. They have made more than 700 million US dollars (approximately approx. RMB 4.5 billion) profit.
Trading data shows that these traders traded “highly correlated” on April 20, 2020, selling an average of 153.5 contracts per minute in the half hour before the close, accounting for 29.2% of the total global market volume. It is worth mentioning that in the documents released by the court, the chat records of this group of traders were also exposed, in which "I want to see the price of WTI become negative", "Please don't tell anyone what happened today", " We have worked hard for many years for this moment."
Another piece of news is related to price manipulation of U.S. Treasuries. On April 15, Tyler Forbes, a former trader of Bank of America Merrill Lynch, appeared in court for the Eastern District of New York and admitted that between January 2019 and June 2019, he manipulated the prices of U.S. Treasury bonds traded in the secondary market. It mainly includes two-year and three-year treasury bonds, and ten-year treasury bonds.
Trader Who Made $700M in Negative Oil Prices Sued
Remember the negative oil price incident on April 20, 2020?
On April 20, 2020, the trading and settlement prices of West Texas Intermediate (WTI) futures, the U.S. benchmark oil price benchmark, fell into negative territory historically, shocking global financial markets.
On April 20, 2020, oil fell into negative territory for the first time as fuel demand plummeted due to the COVID-19 pandemic, triggering a glut of unused fuel on the market that threatens to overwhelm existing U.S. storage facilities. WTI oil prices plummeted to -$38 ahead of the expiration of the benchmark monthly futures contract.
The charges come after more than a dozen traders at Vega Capital London, a firm registered in Essex, England. The group of traders, ranging in age from 20 to 50, made more than $700 million in profits by viciously selling off a large number of WTI crude futures contracts as the crude oil market collapsed. This group of British traders also became famous, known as the "Essex Boys" (Essex Boys).
Just recently, there have been new developments in the allegations against this group of "Essex boys".
According to reports from Bloomberg, The Guardian, Financial Times, Business Insider and other media, Mish International Monetary, a California rare coin trader who suffered a large loss on the day, filed a lawsuit. It is reported that the group of "Essex boys" will be tried in the United States, and a U.S. District Court judge has approved the case against 8 traders of Vega Capital for manipulating crude oil futures.
California rare coin dealer Mish International Monetary (Mish) said it lost a lot of money on April 20, 2020, and accused the traders of colluding to manipulate the market and violating antitrust laws. According to the lawsuit, the defendants purchased special "trade-to-settlement" (TAS) contracts, the price of which was determined by the day's settlement value, and then they conspired to sell a large number of regular WTI contracts before expiration.
According to Mish's lawsuit, several transactions for "Essex Boys" on April 20 of that year were "highly correlated", with 96.2% to 99.7% of the transactions going "in the same direction at the same time". These traders accounted for 29.2% of total WTI crude futures volume in the half hour before the 1:00-1:30 market close, the Financial Times reported.
According to the lawsuit filed by Mish, traders associated with London-based Vega Capital acted like robbers when crude futures fell $56/bbl into negative territory ahead of expiration on April 20, 2020. The defendants allegedly conspired to trade on settlement contracts, which could be bought at any time, with prices tied to the daily settlement window, which began two minutes before 1:30pm in Central. The group of traders was then accused of flooding the market with a "virtual lock-in" that forced WTI prices to record lows. The lawsuit estimates that the group dumped 153.5 contracts per minute, or about 30% of the total, in the half hour that was about to expire.
The next day, WTI rallied from minus $37 a barrel to around $10, giving traders a huge windfall. According to the recently announced rulings, which included an estimated profit of $633 million for CME options and an estimated $71.88 million for ICE.
Mish argued that the group of British traders had violated antitrust laws by manipulating the market. And as defendants, the "Essex boys" argued that they were independent traders, doing only things that were obvious at the time.
Chat records exposed: "Don't tell anyone what happened today"
It is worth mentioning that with the release of US court documents and media exposure, the trading behavior of these "Essex boys" in the negative oil price incident in 2020, as well as their chat records on the social software WhatsAPP at that time followed. exposure.
Court documents show the group of traders communicated in text messages and WhatsApp group chats. Communication includes:
On April 20, traders on the 9th and 12th communicated via text messages. From 10:51 am to 12:00 pm, the messages include: "Continue to sell every 5 o'clock", "You must continue to sell", "I sold more s at 14 [*** ], "I'm calling (a guy who may be trader number 4)", "Everyone is short so we have ammo", "I want to see WTI prices go negative, etc."
(Picture: US court documents)
On April 20, traders 4, 6 and 9 communicated through a WhatsApp group called "Legends XXX". Trader No. 9 wrote, "I'm short 160 spreads and 40 WTI... do you guys add a little more." Trader No. 6 responded, "I'm short 1250 and 500, and will continue to short later. Trader No. 9 went on to say: "I'm 1100 and 310." Trader No. 4 said: "1300 and 500." Trader No. 6: "Do 200 later." Trader No. 9 said: "Okay, Cool, I'll do the same." Trader No. 9 mentioned that there was a 1-cent bid, and he sold 500 ICE May contracts two minutes later.
Trader 1 and Trader 5 also communicated via WhatsApp on April 20. At 7:36 a.m., Trader 1 wrote, "If you need to do anything, please let me know." Trader 5 responded, "Okay, cheers, ti (WTI futures contract) can be done here." AM At 9:20, Trader No. 5 asked Trader No. 1 if he sold the contract, and Trader No. 1 replied, "Yes, lots of 50... how about you?" No. 5 replied, "Yes, sold it. ." About ten minutes later, Trader No. 5 asked, "Is everyone short the WTI futures contract?" Trader No. 1 replied, "Yes." Then Trader No. 5 also said, "I'm on TAS. Made a fortune."
(Picture: US court documents)
At 3:13pm on April 20th, Trader 2 texted the others: "Please don't tell anyone what happened today, lads."
At 3:29 pm on April 20, Trader No. 9 also said to others: "We have worked hard for many years for this moment."
(Picture: US court documents)
Of the 12 traders charged at Vega Capital in London, U.S. District Judge Gary Feinerman in Chicago dismissed the indictment against four traders who did not appear in the chat logs, citing evidence Not enough to link them to the alleged conspiracy. London's Vega Capital itself and its owners are also out of the woods for now, and the company is believed to be just a market maker.
For the remaining eight traders, the U.S. judge ruled that the charges were justified based on chat records and "highly related transactions."
According to reports, Mish has until April 28 to amend his complaint and re-fill the parts that were dismissed.
According to a separate report from the Financial Times, the U.S. regulator, the Commodity Futures Trading Commission, previously analyzed the reasons for the slump in WTI prices on April 20, 2020, but came to no conclusion.
Bank of America traders admit to manipulating Treasury prices
Consider another case of financial manipulation.
According to CCTV Finance, on April 15, local time, Tyler Forbes, a former trader of Bank of America Merrill Lynch, appeared in court for the Eastern District of New York and admitted that he manipulated the secondary level between January 2019 and June 2019. The prices of US Treasury bonds traded in the market mainly include two-year and three-year Treasury bonds, as well as 10-year Treasury bonds.
According to information on the U.S. Department of Justice website, 27-year-old Taylor Forbes, from New York, placed large electronic orders on one side of the market but did not execute them, and then placed smaller orders on the other side to form beneficial prices and increase profits. Prosecutors argue that Taylor Forbes' operations were fraudulent, with actual orders only "partially visible" to the market at specific times, while "false orders" were fully disclosed.
The U.S. Department of Justice has publicly stated that the purpose of Forbes' use of "false orders" is to create a false appearance of market activity, to mislead other traders, and to artificially inflate or depress the prevailing market price so that it can more easily execute its real orders or Get more profit.
Prosecutors pointed out that deception often involves flooding the derivatives market with trade orders that were not intended to be executed in order to induce others to push prices in their intended direction. While it is not illegal to submit an order and then cancel it, it is illegal as part of a strategy designed to deceive other traders.
Forbes pleaded guilty to one count of manipulating the price of securities, and the specific sentence will be announced on July 28, and is expected to face up to 20 years in prison.
According to public information, Forbes started working at Bank of America in 2016 after graduating from Colgate University. He was involved in 194 frauds, according to a filing with the Financial Industry Regulatory Authority, a self-regulatory Wall Street body.
Bank of America fired Forbes in August 2019 for failing to comply with the bank's trading rules, according to FINRA records. Last September, the Financial Industry Regulatory Authority suspended Forbes from practicing and fined him $75,000.
Article source: Brokers China
The first is that the 2020 U.S. WTI negative oil price incident has revealed more inside stories. Recently, a group of British traders will be tried in the United States for allegedly manipulating crude oil market prices. They have made more than 700 million US dollars (approximately approx. RMB 4.5 billion) profit.
Trading data shows that these traders traded “highly correlated” on April 20, 2020, selling an average of 153.5 contracts per minute in the half hour before the close, accounting for 29.2% of the total global market volume. It is worth mentioning that in the documents released by the court, the chat records of this group of traders were also exposed, in which "I want to see the price of WTI become negative", "Please don't tell anyone what happened today", " We have worked hard for many years for this moment."
Another piece of news is related to price manipulation of U.S. Treasuries. On April 15, Tyler Forbes, a former trader of Bank of America Merrill Lynch, appeared in court for the Eastern District of New York and admitted that between January 2019 and June 2019, he manipulated the prices of U.S. Treasury bonds traded in the secondary market. It mainly includes two-year and three-year treasury bonds, and ten-year treasury bonds.
Trader Who Made $700M in Negative Oil Prices Sued
Remember the negative oil price incident on April 20, 2020?
On April 20, 2020, the trading and settlement prices of West Texas Intermediate (WTI) futures, the U.S. benchmark oil price benchmark, fell into negative territory historically, shocking global financial markets.
On April 20, 2020, oil fell into negative territory for the first time as fuel demand plummeted due to the COVID-19 pandemic, triggering a glut of unused fuel on the market that threatens to overwhelm existing U.S. storage facilities. WTI oil prices plummeted to -$38 ahead of the expiration of the benchmark monthly futures contract.
The charges come after more than a dozen traders at Vega Capital London, a firm registered in Essex, England. The group of traders, ranging in age from 20 to 50, made more than $700 million in profits by viciously selling off a large number of WTI crude futures contracts as the crude oil market collapsed. This group of British traders also became famous, known as the "Essex Boys" (Essex Boys).
Just recently, there have been new developments in the allegations against this group of "Essex boys".
According to reports from Bloomberg, The Guardian, Financial Times, Business Insider and other media, Mish International Monetary, a California rare coin trader who suffered a large loss on the day, filed a lawsuit. It is reported that the group of "Essex boys" will be tried in the United States, and a U.S. District Court judge has approved the case against 8 traders of Vega Capital for manipulating crude oil futures.
California rare coin dealer Mish International Monetary (Mish) said it lost a lot of money on April 20, 2020, and accused the traders of colluding to manipulate the market and violating antitrust laws. According to the lawsuit, the defendants purchased special "trade-to-settlement" (TAS) contracts, the price of which was determined by the day's settlement value, and then they conspired to sell a large number of regular WTI contracts before expiration.
According to Mish's lawsuit, several transactions for "Essex Boys" on April 20 of that year were "highly correlated", with 96.2% to 99.7% of the transactions going "in the same direction at the same time". These traders accounted for 29.2% of total WTI crude futures volume in the half hour before the 1:00-1:30 market close, the Financial Times reported.
According to the lawsuit filed by Mish, traders associated with London-based Vega Capital acted like robbers when crude futures fell $56/bbl into negative territory ahead of expiration on April 20, 2020. The defendants allegedly conspired to trade on settlement contracts, which could be bought at any time, with prices tied to the daily settlement window, which began two minutes before 1:30pm in Central. The group of traders was then accused of flooding the market with a "virtual lock-in" that forced WTI prices to record lows. The lawsuit estimates that the group dumped 153.5 contracts per minute, or about 30% of the total, in the half hour that was about to expire.
The next day, WTI rallied from minus $37 a barrel to around $10, giving traders a huge windfall. According to the recently announced rulings, which included an estimated profit of $633 million for CME options and an estimated $71.88 million for ICE.
Mish argued that the group of British traders had violated antitrust laws by manipulating the market. And as defendants, the "Essex boys" argued that they were independent traders, doing only things that were obvious at the time.
Chat records exposed: "Don't tell anyone what happened today"
It is worth mentioning that with the release of US court documents and media exposure, the trading behavior of these "Essex boys" in the negative oil price incident in 2020, as well as their chat records on the social software WhatsAPP at that time followed. exposure.
Court documents show the group of traders communicated in text messages and WhatsApp group chats. Communication includes:
On April 20, traders on the 9th and 12th communicated via text messages. From 10:51 am to 12:00 pm, the messages include: "Continue to sell every 5 o'clock", "You must continue to sell", "I sold more s at 14 [*** ], "I'm calling (a guy who may be trader number 4)", "Everyone is short so we have ammo", "I want to see WTI prices go negative, etc."
(Picture: US court documents)
On April 20, traders 4, 6 and 9 communicated through a WhatsApp group called "Legends XXX". Trader No. 9 wrote, "I'm short 160 spreads and 40 WTI... do you guys add a little more." Trader No. 6 responded, "I'm short 1250 and 500, and will continue to short later. Trader No. 9 went on to say: "I'm 1100 and 310." Trader No. 4 said: "1300 and 500." Trader No. 6: "Do 200 later." Trader No. 9 said: "Okay, Cool, I'll do the same." Trader No. 9 mentioned that there was a 1-cent bid, and he sold 500 ICE May contracts two minutes later.
Trader 1 and Trader 5 also communicated via WhatsApp on April 20. At 7:36 a.m., Trader 1 wrote, "If you need to do anything, please let me know." Trader 5 responded, "Okay, cheers, ti (WTI futures contract) can be done here." AM At 9:20, Trader No. 5 asked Trader No. 1 if he sold the contract, and Trader No. 1 replied, "Yes, lots of 50... how about you?" No. 5 replied, "Yes, sold it. ." About ten minutes later, Trader No. 5 asked, "Is everyone short the WTI futures contract?" Trader No. 1 replied, "Yes." Then Trader No. 5 also said, "I'm on TAS. Made a fortune."
(Picture: US court documents)
At 3:13pm on April 20th, Trader 2 texted the others: "Please don't tell anyone what happened today, lads."
At 3:29 pm on April 20, Trader No. 9 also said to others: "We have worked hard for many years for this moment."
(Picture: US court documents)
Of the 12 traders charged at Vega Capital in London, U.S. District Judge Gary Feinerman in Chicago dismissed the indictment against four traders who did not appear in the chat logs, citing evidence Not enough to link them to the alleged conspiracy. London's Vega Capital itself and its owners are also out of the woods for now, and the company is believed to be just a market maker.
For the remaining eight traders, the U.S. judge ruled that the charges were justified based on chat records and "highly related transactions."
According to reports, Mish has until April 28 to amend his complaint and re-fill the parts that were dismissed.
According to a separate report from the Financial Times, the U.S. regulator, the Commodity Futures Trading Commission, previously analyzed the reasons for the slump in WTI prices on April 20, 2020, but came to no conclusion.
Bank of America traders admit to manipulating Treasury prices
Consider another case of financial manipulation.
According to CCTV Finance, on April 15, local time, Tyler Forbes, a former trader of Bank of America Merrill Lynch, appeared in court for the Eastern District of New York and admitted that he manipulated the secondary level between January 2019 and June 2019. The prices of US Treasury bonds traded in the market mainly include two-year and three-year Treasury bonds, as well as 10-year Treasury bonds.
According to information on the U.S. Department of Justice website, 27-year-old Taylor Forbes, from New York, placed large electronic orders on one side of the market but did not execute them, and then placed smaller orders on the other side to form beneficial prices and increase profits. Prosecutors argue that Taylor Forbes' operations were fraudulent, with actual orders only "partially visible" to the market at specific times, while "false orders" were fully disclosed.
The U.S. Department of Justice has publicly stated that the purpose of Forbes' use of "false orders" is to create a false appearance of market activity, to mislead other traders, and to artificially inflate or depress the prevailing market price so that it can more easily execute its real orders or Get more profit.
Prosecutors pointed out that deception often involves flooding the derivatives market with trade orders that were not intended to be executed in order to induce others to push prices in their intended direction. While it is not illegal to submit an order and then cancel it, it is illegal as part of a strategy designed to deceive other traders.
Forbes pleaded guilty to one count of manipulating the price of securities, and the specific sentence will be announced on July 28, and is expected to face up to 20 years in prison.
According to public information, Forbes started working at Bank of America in 2016 after graduating from Colgate University. He was involved in 194 frauds, according to a filing with the Financial Industry Regulatory Authority, a self-regulatory Wall Street body.
Bank of America fired Forbes in August 2019 for failing to comply with the bank's trading rules, according to FINRA records. Last September, the Financial Industry Regulatory Authority suspended Forbes from practicing and fined him $75,000.
Article source: Brokers China
Risk Warning: Trading financial instruments involves significant risk and may result in the loss of your invested capital. Please ensure you fully understand the risks and seek independent professional advice if necessary. This article does not constitute investment advice or a trading recommendation. Past performance is not indicative of future results.
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