The CFTC charged a banker at a U.S. subsidiary of a global investment bank with a scheme to manipulate the price of an interest rate basis swap.
According to the Complaint filed in the U.S. District Court for the Southern District of New York, the banker engaged in a scheme to manipulate the price of an interest rate swap entered into by an issuer in connection with a bond offering. The Complaint alleges that the banker pushed the prices of five-year basis swaps down on broker screens in order to benefit the bank to the detriment of the issuer.
The CFTC charges the banker with violations of CEA Section 6(c)(1) ("Prohibition regarding manipulation and false information") and CFTC Regulation 180.1(a)("Prohibition on the employment, or attempted employment, of manipulative and deceptive devices"). The CFTC seeks injunctive relief, as well as a civil monetary penalty and remedial ancillary relief.