CFTC said that BlackRock’ subsidiary employee were engaged in two prearranged trades, which were noncompetitively executed and fictitious sales in 2010.
According to the federal watchdog, the employee used a trading strategy to cross BlackRock orders in a 10-year period.
The employee entered in large buying and selling orders with two different futures commission merchants during the same time, when the orders were to be executed on the CBOT floor, said the CFTC.
The orders were for the same specific amount, and one of the orders was designated "all or none," and "all or none" order must be filled in its entirety.
Separately, a JP Morgan Securities employee was found engaged in pre-execution communications with a customer in 2010.
The customer told the employee to sell a certain number of 10-year spreads and to look for any all or none bids, the CFTC said.
The employee found an all or none bid for the same amount as the sell order and sold to that bid, with the result that the customer was on both sides of the transaction, the order said.
The CFTC found both BlackRock and JP Morgan Securities liable for their respective employees’ actions as the employees were acting within the scope of their employment.
