Two via Mining.com. First up, the headline story, May 26:
Glencore Plc has closed the “cash desks” in London and Switzerland that once dispensed money for bribes. Employees implicated in sweeping, cross-border corruption investigations are gone. New safeguards are in place, and boss Gary Nagle says it’s a “different company.”
Now he will have to prove it.
Glencore this week agreed to plead guilty to a web of bribery and price manipulation charges that stretch from Venezuela to Nigeria and Los Angeles in deals with the US, UK and Brazil. The penalties will total about $1.5 billion but there’s a longer-lasting requirement — the deal with the US Department of Justice means Glencore will spend the next three years being scrutinized by an independent monitor.
It’s a potentially seminal moment for the company founded by US fugitive Marc Rich, which has powerful trading networks in every corner of the globe and operates a sprawling suite of mines producing some of the most important commodities. Glencore’s top leadership has been overhauled in the last few years as former CEO Ivan Glasenberg and his lieutenants handed over to a younger generation, although many of the new chiefs are also longtime employees....
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And a bit about the physical oil market, also May 26 (both stories from Bloomberg):
Glencore’s oil-price rigging puts spotlight back on benchmarks
Glencore Plc’s settlement with US prosecutors has cast fresh light on manipulation of an under-the-radar part of the commodities world that’s crucial for valuing physical deals and derivatives.
The raw-materials giant this week agreed to plead guilty to rigging fuel-oil assessment prices after probes into wide-ranging bribery and corruption. The process for setting the benchmarks involves price reporters polling traders in the market for bids, offers and transactions so that they can publish values on products that otherwise would remain private information.
It’s a hugely important part of the industry. Billions of dollars of physical deals are set against the daily benchmarks, which also act as a reference price for big amounts of derivatives. Yet they’re often based on a relatively small number of trades — or none at all — which can give large trading houses an incentive to manipulate physical markets to benefit their derivative positions.
Glencore admitted to conspiring to manipulate from 2011 to 2019 fuel benchmarks set by price-reporting agency S&P Global Platts, which allowed it to reduce costs and boost profits artificially....
....MUCH MORE
So what's a $200+ billion revenue company going to do to get a leg up on the competition?
"The whole reason for the existence of traders is to make as much money as possible, consistent with what's legal...I lived through this: if you didn't manipulate the market and manipulation was accessible to you, that's when you were yelled at."
—Former Goldman Sachs trader
New York Times, May 8, 2002
