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BofA & Morgan Stanley Metals Spoofing Litigation Dismissed on Technicality?

JPM Spoofing
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EDITOR NOTE: This case proves that the purpose of the judicial system is not always to seek justice, let alone parcel out right from wrong or victim from the offender, but rather, to efficiently “resolve” disputes, whether justice is served or denied. The dismissal of spoofing charges against Bank of America and Morgan Stanley attests to this function, whether desirable or not. Both banks got away with their alleged crimes by way of a technicality: “the two-year federal statute of limitations had run out.” The plaintiffs’ case should have been filed earlier. But the problem was that the identities of the guilty party were yet unknown until long after the clock had started ticking. Of course, both banks had previously been fined in the millions for related violations--a fraction of what they probably made through manipulating the markets. Perhaps a Fedcoin or non-bank ILC would help right this long-standing practice among Wall Street banks. You’d think so. But that would only perpetuate the biggest crime of all, which is the schism between “currency” and real “money.” The financial system has manipulated and denatured the monetary environment so that it can take as much as it can from you. As long as you believe that money’s substitute--the dollar, or any form of fiat cash--is the same as “real money,” then you are falling victim to a similar crime to which BofA and Morgan Stanley has been charged, but this is one is operating on a much grander scale. The only way to stand up for yourself and your hard-earned wealth is to take it out of the system by converting the portion of money you want to save into non-CUSIP gold and silver.

A federal judge in Manhattan on Thursday dismissed litigation by traders and trading firms accusing Bank of America Corp and Morgan Stanley of manipulating the precious metals futures market by placing trades and then cancelling them before execution, or “spoofing”.

U.S. District Judge Lewis Liman in Manhattan said the June 2019 lawsuit over alleged spoofing in gold, silver, platinum and palladium futures from 2007 to 2014 was filed long after the two-year federal statute of limitations had run out.

The investors said the clock started in January 2018 when the traders Edward Bases and John Pacilio, both from Connecticut and also defendants, were charged with commodities fraud. Six other people were criminally charged at the time.

But in a 32-page decision, the judge said the clock had begun ticking by December 2016, when a lawsuit alleging manipulation of silver futures contracts in the same period was filed by the same lawyers in the same Manhattan courthouse.

“They knew of the harm as early as 2016,” Liman wrote. “They just did not know the identity of everyone who perpetrated it. The wrong itself was not concealed.”

Lawyers for the investors did not immediately respond to requests for comment.

Bases, who worked at Bank of America, and Pacilio, who worked at Bank of America and Morgan Stanley, face a July 12 trial in Chicago federal court. Both have pleaded not guilty.

In June 2019, Bank of America paid $25 million an entered a nonprosecution agreement to end a Department of Justice spoofing probe, and $11.5 million to end a related U.S. Commodity Futures Trading Commission civil case. Morgan Stanley reached a $1.5 million civil settlement with the CFTC three months later.

The case is In re Merrill, BofA, and Morgan Stanley Spoofing Litigation, U.S. District Court, Southern District of New York, No. 19-06002.

Originally posted on Reuters

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