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Don't F*ck With The CFTC, Royal Bank Of Scotland Edition

When brazenly violating CFTC rules, it's best not to mention the CFTC explicitly.
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(Getty Images)

(Getty Images)

Listen pal, you wanna step onto the CFTC's turf and manipulate international market benchmarks at the expense of counterparties just to earn a buck or two for yourself? Well, you might just end up paying a few mil for it, who knows. But if you think you can talk trash about America's hardworking market regulators while doing so, you best believe Christopher Giancarlo will be ankle-deep in your ass before you can say ISDAFix.

I mean, get a load of Royal Bank of Scotland here:

Among themselves, RBS traders joked about their attempts to manipulate the USD ISDAFIX. On the same day the CFTC announced it was charging the hedge fund Amaranth with attempted manipulation of the price of natural gas futures, an RBS swap trader converted a news story about the lawsuit into a prescient “joke” where RBS took the place of Amaranth as the manipulator sued by the government. The RBS trader emailed this “joke” to other RBS swaps traders and RBS’s swaps broker employees:

Amaranth tried to Manipulate Gas Prices, CFTC Says…

[Swaps Trader 1] tried for manipulating ISDAFIX3 settlement . . . [Swaps Trader 1] is on a recorded line shouting, “GET THE NINES DOWN [Broker], GET THE NINES DOWN, NOW NOW NOW”. RBS could not be reached for comment.

Hey kid, funny “joke.” It's even funnier now that it's being used to levy an $85 million fine against your current or former employer, which the CFTC is not at liberty to say, because the CFTC's version of street justice is extracting fines from banks without ever naming names or charging individual traders, chump.

You know what else the CFTC heard over there at RBS? Get a load of this one:

The Order further finds RBS traders understood how their trading at 11:00 a.m. could have an adverse impact on their counterparties. One noted that “we like tried to f*ck” a bank counterparty on a cash settlement; another noted that they had had a big cash settle with a bank counterparty and had “skrood [sic .] them bigtime.”

F*ck a bank counterparty, eh? Well looks like the only party getting “skrood” today is, uh, RBS shareholders. So, um, take that, fellas.



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