CFTC Settling Suit Against 3Red’s Accused Spoofer Oystacher   

The U.S. Commodity Futures Trading Commission has agreed in principle to settle its spoofing lawsuit against Igor Oystacher and his Chicago firm, 3Red Trading LLC.

CFTC lawyer Elizabeth Streit told a Chicago federal judge Wednesday that the two sides had reached an agreement ahead of a trial set for January. Streit didn’t disclose details of the settlement, noting only that it would have to be approved by the commission.

U.S. District Judge Amy St. Eve said she will move the case along quickly to trial if the deal falls through.“I always get worried when there’s an agreement in principle” with details still to be worked out, she said.

The CFTC accuses Oystacher of manipulating the market on at least 51 trading days from 2011 to 2014 by placing orders he didn’t intend to execute to create the appearance of "false market depth" and price movements that benefited his positions. Oystacher has denied wrongdoing, saying that he places and cancels orders manually at super fast speeds.  read more »

SEC Charges Bank Leumi With Conducting Unregistered U.S. Cross-Border Business

The Securities and Exchange Commission today announced that Israeli-based Bank Leumi has agreed to pay $1.6 million and admit wrongdoing to settle charges that it provided investment advice and induced securities transactions for U.S. customers for more than a decade without registering as an investment adviser or broker-dealer as required under U.S. securities laws.

The SEC’s order finds that Bank Leumi maintained several hundred securities accounts that were beneficially owned by U.S. customers and managed more than $500 million in securities assets for U.S. customers.  To manage and mitigate the risk of violating U.S. laws, Bank Leumi began exiting the U.S. cross border business in 2008.  But despite these efforts, approximately 100 U.S. customer securities accounts remained open with the bank three years later, and bank employees continued to have contact with U.S. customers.  read more »

CFTC regulator warns attorneys about whistleblower 'abuses'

Attorneys for Igor Oystacher and his Chicago-based 3Red Trading firm are getting attention from regulators they're battling in court, but not in a good way.

Rosemary Hollinger, deputy director in Chicago for the Commodity Futures Trading Commission's enforcement division, reminded lawyers attending a securities and commodities enforcement panel last week that it's not just employers who can illegally chill whistleblowers. It's defense counsel, too, she said specifically referring to filings by attorneys in the Oystacher case playing out in federal court in Chicago.

“It's not only the employer who abuses the whistleblower, it can sometimes be defense counsel,” she said at the Oct. 14 panel discussion in Chicago. Asked afterward what she was referring to specifically, Hollinger repeated that “harassment” could be seen in the Oystacher court filings.  read more »

Securities Industry Acclimates to Whistle-Blowers

There has been a shift in how corporations handle whistle-blower complaints as the SEC's bounty program for tips continues to expand, Enforcement Director Andrew Ceresney said.

The program has “had a significant industry impact,” Ceresney told Bloomberg  Oct. 13. “I think many companies are now much more sensitive to the issues.”

The SEC has paid out more than $100 million to whistle-blowers and tips to the agency have increased year after year. The bounty program allows the SEC to give money to tipsters whose information leads to agency sanctions of more than $1 million—typically between 10 and 30 percent of the amount collected.

Venezuela congress probe says $11 billion missing at PDVSA

A congressional probe led by Venezuela's opposition accused the country's giant state oil company PDVSA of corruption on Wednesday over an allegedly unaccounted $11 billion of funds while powerful official Rafael Ramirez was at its helm from 2004 to 2014.

"It is more than the budget of five Central American countries," said commission president Freddy Guevara, of one of the most hardline opposition parties, alleging widespread malpractice at the company. 

In another high-profile case, a Venezuelan businessman pleaded guilty in June in a U.S. court to violating the Foreign Corrupt Practices Act for his role in a scheme involving PDVSA officials, to which prosecutors traced more than $1 billion.  read more »

Former Federal Investigator Says Government Didn't Investigate Wells Fargo Whistleblower Cases

Darrell Whitman, a former investigator for OSHA's Whistleblower Protection Program, says his agency failed to investigate warnings from Wells Fargo employees in 2010.

Six years ago, two Wells Fargo employees filed whistleblower complaints with the federal government.  read more »

CFTC Seeks $3.1M Penalty Against Commodities Pool Chief

The U.S. Commodity Futures Trading Commission asked an Illinois federal judge Tuesday to issue a more than $3.1 million penalty against a Nebraska-based commodities pool operator who a jury found liable for fraud last month and a roughly $1 million penalty against her company, also requesting disgorgement, restitution and a permanent injunction.  read more »