From at least November 2007 through May 2008, Moore Capital Management and its subsidiaries attempted to manipulate the settlement prices of palladium and platinum futures contracts traded on the New York Mercantile Exchange, also known as NYMEX. This practice, known as “banging the close,” defrauded investors in palladium and platinum by exerting upward pressure on settlement prices of futures contracts.
Calling it a “manipulative scheme,” on April 29, 2010 the Commodity Futures Trading Commission made findings and entered sanctions against Moore Capital Management, LP, Moore Capital Advisors, LLC, and Moore Advisors, Ltd. According to the CFTC, Moore caused market-on-close, or “MOC” buy orders, to be entered and executed in the last ten seconds of the closing period for palladium and platinum futures contracts. These last-second orders at the close unlawfully exerted “upward pressure” on the settlement prices of the futures contracts. According to the CFTC, Moore engaged inthis trading strategy “frequently” from 2007 to 2008.
The CFTC further found Moore “failed to supervise diligently” its trading, and “failed to have sufficient policies and procedures designed to detect and deter the violations of the Act and Regulations” prohibiting Moore’s unlawful conduct, which defrauded futures contracts traders in platinum and palladium. According to the CFTC:
The Manipulative Scheme
The Former PM or his execution clerk routinely submitted MOC buy orders in platinum and platinum futures to [an associated person] through Instant Messages (“IMs”), among other means. The Former PM often placed MOC orders with the FCM’s AP with directions that indicated that he wanted to push the settlement prices higher.
To effectuate the Former PM’s manipulative scheme, the AP waited until the last ten seconds of the closing periods of platinum and palladium futures trading to place the Former PM’s buy orders with the floor clerk, who worked in the NYMEX trading pit.
The Former PM engaged in this manipulative strategy throughout the Relevant Period.
If you are a futures trader in platinum or palladium, and wish to speak with us about your legal rights or are interested in participating in litigation concerning Moore’s unlawful conduct, please complete the following form or call us at 1-877-573-0007.