Market Manipulation

In the wake of LIBOR-related revelations, regulators and financial institutions have been vigilant about investigating allegations of benchmark manipulation. Our team has extensive experience with such matters.

CRA has a breadth of experience investigating allegations of collusion between financial institutions. Our analysis starts with understanding the economic incentives for traders to collude. We then layer in deep analysis of financial markets trading data, including quotes provided to customers or orders placed on an exchange, in order to determine whether the evidence provides support for a coordination claim. We also evaluate communications between traders to determine whether any actions discussed are reflected in the data. Our team has successfully helped multiple clients reach favorable resolutions of collusion claims.

CRA has experience investigating coordinated trading between traders. Our team has the expertise to evaluate hundreds of communications between the various traders, including voice, email, and instant message communications, and then study trading data for a client bank to determine whether the activity discussed in the communications was consistent with actions taken by the traders. We measure the impact on the market of allegedly coordinated activity and the impact on the bank’s profits from that activity. CRA’s experts have testified and successfully rebutted analyses by opposing experts and regulators to help provide a favorable resolution for our clients in enforcement actions.

As financial markets have gotten faster and more complex, financial institutions face and even greater challenge when monitoring and investigating trading desks. Our team has deep experience in reviewing a transaction data, whether internal or for the broader market, and providing visualized context for trading decisions. Our expertise in financial markets allows us to review trader communications, and to provide insight into the motivations for trading decisions that data analysis alone would miss. We provide our clients with a clear understanding of the impact of the actions of their traders and any risks that our clients face.

Claims of spoofing or other manipulative trading activity encompass numerous traditional securities and commodities markets, and also evolving trading technologies and financial products. Our experts are fluent in interpreting and communicating complex trading data as well as the economics underlying trading strategies. CRA provides a unique and powerful combination: deep knowledge of various markets and platforms and their nuanced trading strategies; the ability to analyze, distill highly complex trading data and test it against alleged manipulative conduct; and decades of experience communicating our conclusions effectively and convincingly to regulators, judges and juries.