FBI agents posed as commodities traders during a two-year undercover investigation and turned up evidence of massive fraud in futures trading on the Chicago Board of Trade and Chicago Mercantile Exchange, sources familiar with the inquiry said Thursday.
The sources, confirming a Chicago Tribune story, said the newest corruption scandal on the nation's financial markets could rival the insider trading probe that shook Wall Street and brought calls for tougher federal regulation of the stock exchanges.Investigators have amassed secret tape recordings of hundreds of conversations on the trading floors of the world future markets that implicate brokers for a number of major commodities firms in the alleged schemes, the sources said.
They said some brokers rigged trades by themselves or in collusion with other traders, cheating customers out of millions.
The Tribune, which broke the story Thursday, quoted one source as saying investors had lost "a ton of money on this thing."
U.S. Attorney Anton Valukas of Chicago, whose office is heading the investigation, refused to confirm or deny its existence and told United Press International the story "did not come out of my office." Valukas briefed Attorney General Dick Thornburgh on the inquiry at the Justice Department last Friday, sources said.
FBI Director William Sessions met with Thornburgh Thursday. Thornburgh waved away reporters when asked about the investigation and said, "We don't have any comment on that."
Sources said Thornburgh and Sessions were remaining particularly tight-lipped because they were concerned about the impact of any revelations on the market. "We don't know what, if anything, it's going to do to the market," the source said.