23 May 2015

HFT firm Optiver pays $14m over oil price manipulation

20 April 2012  |  5617 views  |  0 cash

Dutch high-frequency trading firm Optiver will pay $14 million to settle US regulatory charges accusing it of manipulating crude oil prices.

The US Commodity Futures Trading Commission (CFTC) says it has secured the $13 million in penalties and $1 million in disgorgement, from a federal court against Optiver Holding and two subsidiaries.

The CFTC says that in March 2007 the Dutch firm's Chicago office tried to manipulate oil prices on at least 19 instances, succeeding at least five times using a tactic called "banging the close" - carrying out a large volume of deals just before the closing period and then taking offsetting positions to push prices in their favour.

As well as the $14 million penalty, three Optiver employees, Randal Meijer, Bastiaan van Kempen, and Christopher Dowson, have been banned from trading commodities for four, two and eight years, respectively.

David Meister, division of enforcement, CFTC, says: "The CFTC will not tolerate traders who try to gain an unlawful advantage by using sophisticated means to drive oil and gas futures prices in their favour. Manipulative schemes like 'banging the close' harm market integrity, and false and misleading statements to exchange officials to cover tracks obstruct the investigative process."

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