Re:EU charges eight banks over alleged government bond cartel
by mickeyp on Friday February 01, 2019 @05:40AM
(#19053122)
When I worked in commodities trading about 8-9 years ago, everyone used Yahoo Chat. However, it also popped up a message (as I recall) informing the user their conversations were being recorded for regulatory reasons.
Re:EU charges eight banks over alleged government bond cartel
by xfitm3 on Friday February 01, 2019 @09:29AM
(#19054308)
I’m really impressed that chat rooms were used to trade information. It’s something I do in my area of technology and it makes perfect sense in hindsight.
Are the groups an open secret to give legitimacy to the info, or is membership more controlled?
Re:EU charges eight banks over alleged government bond cartel
by throwaway0009 on Friday February 01, 2019 @10:05AM
(#19054626)
Chat rooms are used as a way to communicate with clients. Clients can inquire about prices and submit orders through chat. They're also used to share market commentary within banks. It's not allowed to have chats between traders at different banks now.
Re:EU charges eight banks over alleged government bond cartel
by whatok on Friday February 01, 2019 @07:49AM
(#19053663)
Yahoo and AIM. IB used to allow you to login to either just to keep you trapped in BBG.
Re:EU charges eight banks over alleged government bond cartel
by Cthulhu_ on Friday February 01, 2019 @08:04AM
(#19053733)
Same happens (happened?) with the cryptocurrency market, except unregulated; just some people in a chatroom or voice chat, some with a lot of money to spend, working together to influence the price of a currency and the exchanges. Giving each other advance warning of big trades coming in.
Re:EU charges eight banks over alleged government bond cartel
by jklepatch on Friday February 01, 2019 @08:11AM
(#19053768)
The infamous whale groups on telegram. You gotta be super careful with these, there are lots of scam. Ex: the leader of the group tells everybody to sell at 1pm, but actually himself and other get out just before and you end up the only one still holding the bag.
Re:EU charges eight banks over alleged government bond cartel
by Nasrudith on Friday February 01, 2019 @08:34AM
(#19053940)
I think they should be assumed scams period. That is the whole point of the Nigerian Prince fraud aspect - reporting them would be "I got duped while attempting financial crimes!".
Roughly in the mid 2000s it got very common for people in the trading business to get on chatrooms. Bloomberg is probably the best known, but somehow Yahoo Chat also has a piece in the commodity space.
The chats go on constantly, and I would guess people just didn't think anyone would look through the records. Much like with squawk boxes, who would ever imagine someone listening to the recordings?
Similar cases have happened in FX and LIBOR, and it's quite clear what the incentives are. You might think that some banks are long and some short, thus cancelling out the market effect, but that's not the case. Often the trade that's popular is the same for everyone, so the banks are on one side and the customers on the other. So if you have a small group of banks that in a chatroom, it's quite tempting to collude.
You also have to think about how market making works. It's at heart an information business. If you know customers are going to be buying, you want to get inventory first and sell it to them. It's nice to be the first guy to do that but realistically you won't know what's up all the time. Makes good sense to have friends at other banks.