Brazilian securities and exchange commission CVM has filed a lawsuit against BTG Pactual Group and asset management firm Garde over allegations of manipulation of prices in the dollar futures market through "spoofing," Valor Econômico reported.
Spoofing is an illegal practice that involves placing large orders, then canceling them, in order to influence market prices.
The CVM claim was based on an indictment of BSM, the entity responsible for self-regulation of Brazil's stock exchange. CVM's technical area recommends that the bank be held responsible as an investor, the report said.
The two companies did not comment on the case, although BTG Pactual said it presented its defense to CVM on Jan. 8.
BTG Pactual is said to have allegedly gained 900,000 Brazilian reais from the suspicious operations, according to calculations from CVM's technical area. Meanwhile, Garde allegedly obtained financial advantages worth 175,000 reais. The investigation was opened in June 2017.
As of Jan. 31, US$1 was equivalent to 3.17 Brazilian reais.
