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Federal prosecutors are charging a group of traders with manipulating U.S. futures markets through a practice known as spoofing.

Authorities yesterday announced charges against eight people, some of whom had been employed by HSBC, Deutsche Bank and UBS.

Read: OSC hands out bans, $5 million in sanctions for fraud

The investigation by the Justice Department, FBI and Commodities Futures Trading Commission targeted spoofing. That’s when a trader places buy or sell orders with the intent to cancel them before the transactions are completed. That creates the illusion of demand, inflating prices to benefit the trader’s market positions.

Read: Canadians more confident about their financial futures: Mackenzie survey

The Justice Department’s John Cronan says such manipulation erodes confidence in U.S. markets and “creates an uneven playing field” for legitimate traders and investors.

The charges are the latest in a series of civil and criminal actions brought against banks.

Originally published on Advisor.ca
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