Hagens Berman Blog

Whistleblower News: Fannie, Freddie Bonds. Barclays

by HB Whistleblower Legal Team

06/01/2018

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U.S. Opens Criminal Probe Into Trading in Fannie, Freddie Bonds

The U.S. has opened a criminal investigation into whether traders manipulated prices in the $550 billion market for unsecured bonds issued by Fannie Mae and Freddie Mac, according to people familiar with the matter.

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The probe, parts of which were described by four people familiar with it, shows that investigations by the Obama Justice Department into market manipulation by bank traders are continuing under President Donald Trump. The Obama administration secured billions of dollars in settlements and criminal charges tied to the rigging of currency markets and benchmark interest rates.

The latest inquiry is in its early stages and focuses on whether traders at banks coordinated with one another in order to benefit the institutions they work for, said two of the people, who asked not to be named because the investigation is confidential. Investigators are looking at potential fraud and antitrust violations, four people said. The identity of the banks under scrutiny couldn’t be determined. read more »

Ex-Barclays Banker Says Euribor Rates Weren't Tweaked for Trader

A former Barclays Plc banker who submitted rates that help determine a key benchmark interest rate repeatedly batted back suggestions that she considered trading profits when making her entries.

Sisse Bohart, who is on trial in London for rigging Euribor, told prosecutors Friday that traders’ requests for her to nudge the rate one way or another “made no difference” to her final submissions.

Bohart is one of five defendants who allegedly conspired to rig the euro interbank offered rate to benefit their trading positions at Barclays and Deutsche Bank AG between 2005 and 2009. The rate is tied to trillions of dollars worth of loans and derivatives. They all deny the charges. read more »

Forbes Macroeconomist Claims Bitcoin Price is Being Manipulated

Peter Tchir cited three major reasons why he thinks the prices of Bitcoin and other digital currencies are being manipulated.

  1. Supply Concentration. Tchir noted that there is, allegedly, a small number of people who hold a disproportionately large amount of Bitcoin and other cryptocurrencies. These people have natural incentives to push prices higher. However, unlike the regulated stock market where large shareholders are subject to additional regulations and scrutiny, there are no such rules when it comes to cryptocurrencies.

  1.  Miner Incentives. He also shared that miners, who may also hold significant positions, would also want prices to increase.

  1. Price Arbitrage. Here, Tchir drew a parallel to price manipulation in the regulated LIBOR and FX markets, which have resulted in legal action. Tchir      speculated that traders who took the time to set up accounts on different exchanges to arbitrage price differences are rewarded.

While the DOJ’s probe is still private, sources familiar with the matter have reported to Bloomberg that authorities are focusing on two particular practices that traders may be using to manipulate prices: spoofing and wash trading. The DOJ is also collaborating with the CFTC in its investigation. read more »

Philadelphia pharmacy owners pay $3.2M to settle fraud claims

The owners of a Philadelphia pharmacy have agreed to pay $3.2 million to the federal government to resolve Medicare fraud allegations, according to the U.S. Attorney's Office.

Irina Minkovich and Yelena Babchinetskya, owners of I&L Express Pharmacy in Northeast Philadelphia, were alleged to have violated the False Claims Act by billing Medicare for prescription medications that were not actually dispensed during a period from Jan. 1, 2009, through Dec. 31, 2015. read more »