A New York federal judge has approved settlements by hedge fund Moore Capital Management LP and Joseph Welsh, a former MF Global Inc. broker, totaling nearly $100 million. The settlement was in a class action over manipulation in the platinum and palladium markets. Judge William Pauley granted preliminary approval to two settlements by Moore totaling $57.4 million and two settlements by Joseph Welsh totaling $42 million. Judge Pauley rejected objections by the liquidating trustee for MF Global and a potential class member. The settlements announced in August 2013 resolved claims over the alleged practice of “banging the close,” in which traders enter buy orders in the final seconds of a trading day in order to drive up futures contract prices.
The Plaintiffs filed suit in 2010 after the U.S. Commodity Futures Trading Commission (CFTC) accused Moore of attempted manipulation. Moore agreed to settle the CFTC’s claims for $25 million. Under the recent settlements that were approved, the hedge fund will pay $48.4 million to a class of Plaintiffs that bought palladium futures contracts between June 2006 and April 2010, and will pay $9.4 million to a class of plaintiffs that bought physical platinum or palladium during the same time period. Welsh’s insurers have denied coverage on his claims.
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