Russian gang suspected of scam in ICE market

apau

Member
63 4
Saw this in the FT this morning. This is all the market needs! I wonder if the broker had anything to do with it. I just can't believe this kind of things go on I hope the brokerage is unaffected as it does not look to be there fault.

"The City of London Police revealed that they had arrested two men — one a Russian broker — over suspected money-laundering as part of a global alleged scam spanning Switzerland, the Caribbean and Russia. The police did not name the broker, but people familiar with the situation said it was Dzimitry Niadzvetski, who worked at a London unit of ADM, the US agricultural trader and producer in London.
Mr Niadzvetski has been released on police bail, without charge. His lawyer declined to comment.
A Russian oil firm, and Swiss and British Virgin Islands-headquartered investment firms are suspected of being used as a front for a Russian gang to launder gains, City police said, adding that they had frozen $22m so far as a result of its probe.
ICE, which routinely monitors for suspicious trading, presented its concerns to the police and collaborated closely with the probe.
“Our investigation points towards a suspected Russian organised crime group using London’s futures market to launder millions of dollars worth of criminal revenue,” said Detective Inspector Craig Mullish.
The revelation is a further blow to the City days before the prime minister, David Cameron, is due to host a global anti-corruption summit. The government wants to clamp down on offshore finance and tax havens following a global furore sparked by the release of the Panama Papers.
Mr Cameron has been criticised by campaigning groups for not doing enough to clean up his own back yard.
ADM Investor Services, the futures brokerage arm of ADM, said: “We can confirm an employee was suspended following an investigation by the City of London Police. [ …] There is no tolerance for improper behaviour and we will take action if it transpires he has broken the terms of his employment.”
Our investigation points towards a suspected Russian organised crime group using London’s futures market to launder millions of dollars worth of criminal revenue
DI Craig Mullish, City of London Police
As part of its probe around ICE Futures Europe, the financial district’s police force arrested the 43-year-old Russian broker just before Easter. He was interviewed again this month, according to people familiar with the situation. A British trader has also been interviewed under caution, which is when suspects are read their rights.
Authorities were initially tipped off about the alleged extensive network via suspicious trading in crude oil futures on a London market operated by ICE, according to people familiar with the situation. ICE said: “We notified the authorities immediately upon detecting suspicious trading activity.”
The FCA has also been informed.
The Russian broker’s trading accounts valued at $22m were frozen by a clearing firm for being suspected proceeds of crime, the police said.
Companies and traders use ICE Futures Europe’s exchange to speculate and hedge their exposure to fluctuating crude oil prices. The venue is one of the world’s most liquid markets for energy futures trading, with big users like electricity and power providers, banks and high-frequency traders making up the majority of the exchange’s members."
 
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Alessiop

Junior member
17 1
Saw this in the FT this morning. This is all the market needs! I wonder if the broker had anything to do with it. I just can't believe this kind of things go on I hope the brokerage is unaffected as it does not look to be there fault.

"The City of London Police revealed that they had arrested two men — one a Russian broker — over suspected money-laundering as part of a global alleged scam spanning Switzerland, the Caribbean and Russia. The police did not name the broker, but people familiar with the situation said it was Dzimitry Niadzvetski, who worked at a London unit of ADM, the US agricultural trader and producer in London.
Mr Niadzvetski has been released on police bail, without charge. His lawyer declined to comment.
A Russian oil firm, and Swiss and British Virgin Islands-headquartered investment firms are suspected of being used as a front for a Russian gang to launder gains, City police said, adding that they had frozen $22m so far as a result of its probe.
ICE, which routinely monitors for suspicious trading, presented its concerns to the police and collaborated closely with the probe.
“Our investigation points towards a suspected Russian organised crime group using London’s futures market to launder millions of dollars worth of criminal revenue,” said Detective Inspector Craig Mullish.
The revelation is a further blow to the City days before the prime minister, David Cameron, is due to host a global anti-corruption summit. The government wants to clamp down on offshore finance and tax havens following a global furore sparked by the release of the Panama Papers.
Mr Cameron has been criticised by campaigning groups for not doing enough to clean up his own back yard.
ADM Investor Services, the futures brokerage arm of ADM, said: “We can confirm an employee was suspended following an investigation by the City of London Police. [ …] There is no tolerance for improper behaviour and we will take action if it transpires he has broken the terms of his employment.”
Our investigation points towards a suspected Russian organised crime group using London’s futures market to launder millions of dollars worth of criminal revenue
DI Craig Mullish, City of London Police
As part of its probe around ICE Futures Europe, the financial district’s police force arrested the 43-year-old Russian broker just before Easter. He was interviewed again this month, according to people familiar with the situation. A British trader has also been interviewed under caution, which is when suspects are read their rights.
Authorities were initially tipped off about the alleged extensive network via suspicious trading in crude oil futures on a London market operated by ICE, according to people familiar with the situation. ICE said: “We notified the authorities immediately upon detecting suspicious trading activity.”
The FCA has also been informed.
The Russian broker’s trading accounts valued at $22m were frozen by a clearing firm for being suspected proceeds of crime, the police said.
Companies and traders use ICE Futures Europe’s exchange to speculate and hedge their exposure to fluctuating crude oil prices. The venue is one of the world’s most liquid markets for energy futures trading, with big users like electricity and power providers, banks and high-frequency traders making up the majority of the exchange’s members."

To be honest with you, if trades in question were executed and/or cleared through ADM, it would be really unlikely that no one there had noticed something was smelly...Bear in mind that, quoting the article, "ICE presented its concerns to the police"...straight to the police! Market supervisors working at an exchange don't go straight to the police unless is something clearly dodgy. And if it was something that dodgy (which apparently is) I'm sure that anyone involved in the trading process at ADM (risk, compliance, backoffice, etc..), with a bit of brain, would have noticed somenthing...
As far as I know, the other guy arrested is English and was a colleague of Dzimitry Niadzvetski at ADM
 

apau

Member
63 4
Very true, I found it odd that the Exchange went to the police.

We will see how this one plays out. Judging by the numbers this could be a significant amount of revenue for them lost.
 
 
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