Commodity Futures Trading Commission

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A Revolving Door Farce: CFTC Commissioner Bails To Head Regulator's Biggest Opponent





There is no better way to describe what the recently departed CFTC commissioner Scott O'Malia just did when he bailed from the commodity watchdog to become the new head of the International Swaps and Derivatives Association, aka ISDA, the biggest banking group that has constantly opposed every intervention and attempt to regulate the swaps market by the CFTC since the Lehman crisis, than an epic farce.

 
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These Are The 10 "Liquidity-Providing" HFT Firms The SEC Is Investigating





Despite a full court press of PR to confirm HFT firms are friends of retail investors and do no wrong; the SEC, it appears, sees it differently. While Mary White has confidently explained the market is not rigged, her agency is now actively seeking tips, complaints, or referrals that show, as The Chicago Tribune reports, evidence of abuse of order types, as well as traditional forms of abusive trading like "layering" or "spoofing" and other issues relating to high-frequency trading that might be violations of the law. Here are the 10 firms (including poster child holy-grail trader Virtu Financial) that the SEC is probing... can you spot the oddly missing one...

 
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Barclays Fined For Manipulating Price Of Gold For A Decade; Sending "Bursts" Of Sell Orders





It was almost inevitable: a week after we wrote "From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold" and days after "Barclays' Head Of Gold Trading, And Gold "Fixer", Is Leaving The Bank", earlier today the UK Financial Conduct Authority finally formalized what most in the "tin-foil" hat community had known for years, when it announced that it fined Barclays £26 million for manipulating "the setting of the price of gold in order to avoid paying out on a client order." Furthermore, the FCA confirmed that those inexplicable gold raids which come as if out of nowhere, and slam gold with a vicious force so strong sometime they halt the entire market, had a very specific source: Barclays, whose trader Daniel James Plunkett, born 1976, "sent out a burst of orders aimed at moving the price of the yellow metal."

 
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A Stumped Deutsche Bank Has 11 Reasons (Or "Excuses") Why Everyone Is Buying Treasurys





Many are perplexed by the 'strength' in Treasuries as yields collapse despite a headline payroll print propagandized (choosing to be non-believers in the bond-market's all-knowing eye). As Deutsche Bank notes, for well established reasons, a multi-decade Pavlovian response to much stronger than expected US data has been higher Treasury yields, which usually provides some USD lift. Last Friday, this plainly did not work, which proved extremely costly for many in the trading community. At a minimum Pavlov’s dog choked, but is Pavlov’s dog dead? The short answer is no, but Pavlov’s dog may have taken off the summer.

 
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Even The CME Is Getting Tired Of Silver Manipulation





Everyone has seen them: those "inexplicable" bouts of furious selling in gold and silver, coming out of nowhere with no news or catalyst. In fact, look no further than what happened first thing this morning, when an unknown seller, smashed all stops in one big sale, and took silver to its lowest price for 2014.  This was a premeditated and deliberate selling of silver with one simple purpose: push and reprice silver lower. But this is nothing new: precious metal traders, especially those who are on the other side of the table of the BIS' Mikael Charoze or Benoit Gilson, and countless other commercial banks, are all too aware of this behavior and they take it for granted.  No, the real surprise is that suddenly none other than the CME is getting worred that manipulation this blatant is finally chasing regular retail traders away who are tired of being fleeced on a daily basis, leaving central banks and a few "fixing" banks to trade only with each other, which is not acceptable - after all it is the muppets' money that is fair game, not that of other cartel members. 

 
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A Summary Of What Hedge Funds Are Buying And Selling





Large speculators reduced ther S&P 500 positioning to net short this week and their NASDAQ longs to a one-year low as BofAML reports on CFTC data. Macros funds decreased their long exposure to S&P500 and NASDAQ to now hold short exposure. They also decreased their long exposure to US Dollar (raising their AUD longs to a record high) and maintained their long exposure to 10-year Treasuries. They decreased their long exposure to commodities and increased their long exposure to EM. Across all asset classes, positioning is at extremes.

 
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Bart Chilton Joins America's Largest Law Firm As Policy Advisor





It seems like it was only yesterday (actually it was early November) when infamous CFTC commissioner, legendary threat to gold manipulators nowhere, and Alexander Godunov impersonator, Bart Chilton made a very dramatic exit stage left. At the time, we asked rhetorically if said dramatic depature was just for show. The rhetorical answer to the rhetorical question: of course it was, confirmed moments ago when Chilton became just the latest "regulator" to take the great revolving door out of a worthless public service Washington office into a just as worthless, but much better paying private-sector Washington office. Presenting the latest employee of DLA Piper, the largest law firm in the US, and possibly the world, by number of partners - Bart Chilton, poet.

 
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Banks Win Again As Proposed "Toughened" Basel Derivatives Rule "Seems To Have Evaporated"





So from MF Global's "vaporized" commingled client assets to Basel's "evaporated" toughened derivatives rules, the banks are indeed "very happy." And now back to perpetuation the illusion that the system is stable.

 
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SEC Busts HFT Firms For "Tricking People Into Trading At Artificial Prices"





On Monday, in "High Frequency Trading: Why Now And What Happens Next" we predicted that "the high freaks are about to become the most convenient, and "misunderstood" scapegoat, for when the market finally does crash. Which means that those HFT-associated terms which very few recognize now, especially those on either side of the pro/anti-HFT debate who have very strong opinions but zero factual grasp of the matter, such as the following:

  • Layering: multiple, large orders are placed passively with the goal of “pushing” the book away

Of course, another name for "layering" is "spoofing" which is precisely the term that the SEC used today when it announced that it charged the owner of a New Jersey-based trading firm and several other defendants "in a scheme to manipulate the market through an illegal practice known as "spoofing."

 
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DoJ Confirms "Insider Trading" Probe Of HFT





And all it took for the FBI, the SEC and now the DOJ to figure out the casino was rigged all along, was for a Michael Lewis book to do their job for them.

  • DOJ PROBING HIGH SPEED TRADING FOR INSIDER TRADING: REUTERS
 
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"HFT Is A Growing Cancer" Says Mom And Pop's Favorite Retail Broker Charles Schwab





"High-frequency traders are gaming the system, reaping billions in the process and undermining investor confidence in the fairness of the markets. It’s a growing cancer and needs to be addressed.  If confidence erodes further, the fuel of our free-enterprise system, capital formation, is at risk. We can’t allow that to happen. For sure, we still believe investing in equities is a primary path to long-term wealth creation, and we believe in the long-term structural integrity of the markets to deliver that over time for individual investors, which is all the more reason to be vigilant in removing anything that creates unfair advantage or undermines investor confidence... High-frequency trading isn’t providing more efficient, liquid markets; it is a technological arms race designed to pick the pockets of legitimate market participants. That flies in the face of our markets’ founding principles.

 
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SEC Has Opened Several HFT Probes





To think all it took to wake up not only the FBI (which generously provided a phone number to all interested parties so others could do its work for it) but the porn-addicts at the most corrupt, complicit and clueless, not to mention bought and paid for, "regulator" in US history, the SEC from a five year slumber - yes, we started warning about HFT in April of 2009 - was one Michael Lewis book. Moments ago we learned that the SEC, with a five year delay, has opened several investigations into HFT.

 
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Here Come The Feds: FBI Probing HFT





It is perhaps little wonder that Virtu was in such a hurry to use the cover of the JOBS Act to IPO itself before the whole HFT 'game' was exposed. Just 5 years after we first drew the world's attention to the potential damage that HFT could do; and mere minutes after we posted our article on how HFT is being set up to be the scapegoat for all that is broken with the market and conveniently distracting from the Fed, and god, or perhaps his agent on earth Goldman Sachs, 'completely unexpectedly' sends in the FBI:

  • *FBI SAID TO PROBE HIGH-SPEED TRADERS OVER ABUSE OF INFORMATION
  • *FBI Working With SEC, CFTC in High-Speed Investigation
  • *FBI Investigating Whether High-Speed Firms Trade on Nonpublic Information

Now, the question is: how many HFTs will stop trading for fear that any further trading on 'non-public information' will be deemed criminal from this point... or keep trading and lobby/hope that "a reasonable man" will believe their liquidity-providing lies.

 
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How (& Why) JPMorgan & COMEXShould Be Sued For Precious Metals Manipulation





While every other asset class in the world has now been found to be subject to some form of manipulation (from LIBOR rates to FX fixes and from commodity warehousing to HFT equity front-running), the stakes in a COMEX silver/gold/copper manipulation lawsuit are staggering. Not only is market manipulation the most serious market crime possible, the markets that have been manipulated and the number of those injured are enormous. It is likely not an exaggeration to say that any finding that JPMorgan and the COMEX did manipulate prices as we contend could very well result in the highest damage awards in history. That’s no small thing considering the tens of billions of dollars that JPMorgan has coughed up recently for infractions in just about every line of their business. Our point is that no legal case could be potentially more lucrative or attention getting than this one. It is clear the CFTC will never act and so class-action lawsuits may just be the only way the data is du into deep enough to uncover the truth.

 
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