May 6, 2015 / 9:11 PM / 4 years ago

Ex-MF Global trader to settle manipulation claims by U.S. regulator

NEW YORK, May 6 (Reuters) - A former trader at the broker-dealer unit of MF Global Holdings Ltd’s has agreed in principle to settle a U.S. regulator’s claims that he tried to manipulate palladium and platinum futures prices, according to a court filing.

In a letter filed on Tuesday in federal court in Manhattan, Joseph Welsh’s lawyer said the two sides expect to finalize the agreement within 30 days, ending a 2012 lawsuit filed by the U.S. Commodity Futures Trading Commission.

The letter did not include the terms of Welsh’s settlement, which would resolve the case ahead of a trial that had been tentatively scheduled for June 15.

Welsh’s lawyer, David Mollon, did not respond to a request for comment. A CFTC spokesman declined to comment.

The CFTC accused Welsh, who worked at MF Global Inc, of scheming with a former portfolio manager at hedge fund Moore Capital Management to artificially inflate prices of palladium and platinum futures contracts traded on CME Group Inc’s New York Mercantile Exchange from 2006 to 2008.

Moore Capital and the former portfolio manager, Christopher Pia, previously settled related claims with the CFTC for $25 million and $1 million, respectively.

The allegations also prompted class action lawsuits against MF Global, Moore and Welsh from purchasers or sellers of platinum or palladium futures and purchasers of the metals in the physical market between 2006 and 2010.

Those lawsuits have since been settled. MF Global filed for bankruptcy in 2011.

The case is U.S. Commodity Futures Trading Commission v. Welsh, U.S. District Court, Southern District of New York, No. 12-01873. (Reporting by Joseph Ax in New York; Editing by Steve Orlofsky)

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