Market Manipulation yet no compensation?

[bigdatascience]

I am surprised that Traders, particularly professional(self employed traders) have not been properly compensated for the abuse of the Forex Market by Banks. Why were the date/times\symbols of trades not published so that victims could then be compensated for trades?

Arbitrary fines seem pointless, why were the victims most directly affected no properly compensated. Your thoughts please.

Best,

A

 

[richieforex]

Unless you were trading directly with a tier 1 liquidity provider I am guessing we as retail traders could not sue them! It would be the brokers who would need to take legal action.

 

[gerryg]

I am surprised that Traders, particularly professional(self employed traders) have not been properly compensated for the abuse of the Forex Market by Banks. Why were the date/times\symbols of trades not published so that victims could then be compensated for trades?

Arbitrary fines seem pointless, why were the victims most directly affected no properly compensated. Your thoughts please.

Best,

A

Provide that opportunity and tons of newbies will rush to your office claiming professional traders of themselves. This idea is a mere nonsense, like any other chaos FX is done "as is", no history, as nothing is saved.

 

[bigdatascience]

Provide that opportunity and tons of newbies will rush to your office claiming professional traders of themselves. This idea is a mere nonsense, like any other chaos FX is done "as is", no history, as nothing is saved.

The central banks did not agree with that, they fined they Banks by checking the chat logs against market moves that were coordinated by them, so the data was clearly there to verify the manipulation. So if the central banks felt that market moves were manipulated, why not have all the loss making trades that were made and stored at broker services at the same time unwound as well during those periods?

 

[Rhody Trader]

The central banks did not agree with that, they fined they Banks by checking the chat logs against market moves that were coordinated by them, so the data was clearly there to verify the manipulation. So if the central banks felt that market moves were manipulated, why not have all the loss making trades that were made and stored at broker services at the same time unwound as well during those periods?

Proving attempted or actual manipulation is pretty straightforward. The major challenge is proving damages. You have to prove that said manipulation actually moved the market and by how much. Not an easy thing. Then you have the issue of a 2-sided market. If you unwind positions - which could be an unholy mess of a job when considering all the potential matchings - you may make some traders better off, but you make others who did nothing wrong worse off.

 

[bigdatascience]

Proving attempted or actual manipulation is pretty straightforward. The major challenge is proving damages. You have to prove that said manipulation actually moved the market and by how much. Not an easy thing. Then you have the issue of a 2-sided market. If you unwind positions - which could be an unholy mess of a job when considering all the potential matchings - you may make some traders better off, but you make others who did nothing wrong worse off.

There are essentially 2 types of damages:

1. The counterparty in the OTC transaction that lost our due to the manipulating parties criminal conduct.

2. The traders with strategies that were impact by the "manipulating party" during the period in question.

The (2) victims were impacted indirectly but they're still victims who suffered a financial loss. Driving markets counter to it's "normal" behaviour making it more predictable to them but less so to those who were in the market costs others money. That's why they do it, to take money away from other participants in the same market. The symbols, their trades, our trades are all logged and the regulators have the date/times and impact. I don't see why traders are exempt from damages, particularly the payment of such damages would reduce the likelihood of future manipulation.

The manipulation can be subtle, call-put parity means libor/forex manipulation can impact forex/rates markets. Unless their is more legal accountability it will remain a financially viable option for large FIs who only face arbitrary calculated fines rather than the real cost.

I suggest to begin with ISDA agreements need to a legal definition of a manipulated market so that the trades are voided if fixing periods were founded to be manipulated which would extend to trades through brokers.

Best,

A