Another "Conspiracy Theory" Bites The Dust: UBS Settles Over Gold Rigging, Many More Banks To Follow

Tyler Durden's picture

Remember when everyone decried wholesale Libor manipulation as a crazy conspiracy theory (Zero Hedge: January 2009: "This Makes No Sense: LIBOR By Bank") because after all, it was impossible for so many people to keep their mouth shut or whatever the generic justification is for disproving such "conspiracy theories"? Why, none other than ICAP chief Michael Spencer says they all though Libor was "unmanipulable." As it turns out, not only is Libor manipulable(sic), and a vast rate-rigging "conspiracy theory" is quite possible when everyone's interests are aligned, but it also was massively profitable.

Then it was the turn of the even more massive, multi-trillion FX market, when first UBS squealed like a pig and soon ratted out every other bank in the criminal "Cartel" (or was it "Bandits"?) syndicate (see: "Meet The (First) Seven Banks Who Rigged The FX Market"). End result: banks such as JPM, Citi and BofA forced to review their criminal ways and adjusting their third quarter results a month into Q4. Many more legal fees, charges and settlement coming however for those who lost money on the other side of such long-running manipulation, please accept our condolences: you won't see a penny.

And finally, there was the precious metals market: a market which all the Keynesian fanatic paper bugs said was immune from manipulation, be it of the central or commercial bank kind, even with every other market clearly exposed for perpetual rigging either by hedge funds, by prop desks, by HFTs, or central banks themselves.

Sadly this too conspiracy theory just was crushed into the reality of conspiracy fact, when moments ago the FT reported that alongside admissions of rigging every other market, UBS - always the proverbial first rat in the coalmine, to mix and match metaphors- is about to "settle" allegations of gold and silver rigging. In other words: it admits it had rigged the gold and silver markets, without of course "admitting or denying" it did so.

From the FT:

UBS is to settle allegations of misconduct at its precious metals trading business alongside a planned agreement between UK and US authorities and seven banks over accusations of foreign exchange market rigging.


* * *

UBS is expected to strike a settlement over alleged trader misbehaviour at its precious metals desks with at least one authority as part of a group deal over forex with multiple regulators this week, two people close to the situation said. They cautioned that the timing of a precious metals deal could still slip to a date after the forex agreement.


Regulators around the world have alleged that traders at a number of banks have colluded and shared information about client orders to manipulate prices in the $5.3tn-a-day forex market. UBS has previously disclosed that it launched an internal probe of its precious metals business in addition to its forex investigation. It declined to comment for this article.


Unlike at other banks, UBS’s precious metals and forex businesses are closely integrated. The business units have joint management and the bank’s precious metals staff – who mainly trade gold and silver – sit on the same floor as the forex traders.


One person familiar with UBS’s internal probe said the bank found a small number of potentially problematic incidents at its precious metals desk.

"Potentially provlematic incidents"? One must give props to the FT for always finding just the right amount of politically correct lipstick to cover up what was market manipulation, pure and simple, which continued for years and years, even as the same FT routinely mocked everyone who alleged otherwise.

The good news is that the FT will finally reinstate the Gold manipulation article which is penned in February then promptly removed following complaints from up high.

Some more from the BOE's favorite media outlet:

The head of UBS’s gold desk in Zurich, André Flotron, has been on leave since January for reasons unspecified by the lender.

Surely it is because he made too much money rigging FX and gold?

Those who wish to send Andre their regards, may do so courtesy of his LinkedIn profile...

... Because he is one of many people responsible for such perfectly new normal trades as "Vicious Gold Slamdown Breaks Gold Market For 20 Seconds." Recall what "a humble block of 2000 gold futs (GC) taking out the bid stack, and slamming the price of gold, managed to halt the gold market: one of the largest "asset" markets in the world in terms of total notional, for 20 seconds" looks like:

Thank you Monsieur Flotron for teaching us how market manipulators "trade" gold:

Mr Flotron has not been accused of wrongdoing and has never responded to any requests for comment. He has labelled his professional status on his LinkedIn profile as being “on leave, keen to return in due time”. 


The gold market has this year become the latest trading area to be subjected to heavy regulatory scrutiny and allegations of price-rigging. The FCA fined Barclays £26m in May after an options trader was found to have manipulated the London gold fix.


Germany’s financial regulator BaFin has launched a formal investigation into the gold market and is probing Deutsche Bank, one of the former members of a tarnished gold fix panel that will soon be replaced by an electronic fixing.

As for what happens next, the game is clear, because the only thing that can surpass the "developed world's" rigged markets is said world's "judicial" system: rigged far more than a $10 billion gold market sell order at 1 am in the morning. The TBTF, aka Too Big To Prosecute Banks will settle, paying out pennies on the dollar of the profits they made from rigging gold, silver, FX, libor, Interest rates, equities, and so on, and will lay low for a while until the rigging resumes.

But fear not: even as the criminal banks stay out of the rigged market for a month or so - after all they have to at least give the appearance of complying with the rigged law - the central banks, courtesy of the "People Bringing You Currency Manipulation On A Daily Basis" located conveniently at the nexus of central banking in the Bank of International Settlements in Basel, will keep on rigging. Or else none other than Benoit Gilson, Head of Foreign Exchange & Gold at the BIS will be forced to report that he too is "on leave, keen to return in due time"...

Alas, we are far too deep inside the rabbit hole at this point to even pretend normalcy can ever again exist without the biggest systemic reset in history.

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ekm1's picture

Bank lobby is being decimated by Pentagon.

Soon official death will be announced, in my view.


Welcome to Pentagon Junta, as in the 60s and 70s


Just my view, of course

InjectTheVenom's picture

Andre's twitter page :  "...spending my Sunday at Home Depot shopping for a new nailgun"

nope-1004's picture

He's a PM trader, in a group of PM traitors.  I don't need the FT to tell me something I can glaringly see with my own eyes.  PM's have reacted 180 degrees from their logical course, defying all laws of nature during currency debauchery.


Ignatius's picture

Wondering if this news is related to Friday's PM pop?

Richard Chesler's picture

And this time they'll get a wrist slapping they'll never forget.


strannick's picture

Like the London Gold pool (

TruthInSunshine's picture

If you're not a highly positioned insider with dirt on politicians, regulators& judges, stay out of the shark infested waters, and do your own thing.

Banks are now the most corrupt, malignant entities, infecting host economies, on the face of the earth. Their corruption (allowed by politicians, regulators & judges) will cause developed and emerging nations to fall.

Let these people cannibalize each other, which they will do when the flocks of bountiful sheep they've always preyed on get thinner and thinner - this is when you will see them PUBLICLY turn on each other and when the wide standard deviation events will take place.

Here's a blast from the past. Remember when the University of Texas took PHYSICAL delivery of 1 bln of gold?

They then sold 375 million of that PHYSICAL gold & invested the proceeds into PAPER/ELECTRONIC GOLD FUTURES!!!


kliguy38's picture

I prefer to reduce them to just  DOUCHEBAGS....... I wonder what Traitor Dan will say ......hehehehe

Pladizow's picture

Perhaps the banking cartel can hire Martin Armstrong to defend them as he so adamantly argues there is NO gold manipulation!

BaBaBouy's picture

In 2000 I Had A SHITLOAD Of SILVER CALL Options That Worthlessly Expired Into ZERO...

When Is My $250,000 Compensation From These Fecks Coming ???????????????

TruthInSunshine's picture

lmao. Guy's last name is Flotron.

Now they're just flipping the bird.

knukles's picture

Oh, come on, everybody.  Give the guys some slack.
1.)  UBS pleaded guilty neither admitting or denying guilt to the gold fixing/rigging/manipulation.  At the LMBA fixes  Anybody but me ever wonder why they were called fixes?  I asked my boss 25 years ago and he said it was a quaint term.  I repeated and was told to STFU and learn something.
2.)  Having plead guilty to the London Fixing Fixings, the investigation will cease as Justice Has Been Served.
3.)  Thus, there is no need to rig the market as in it doesn't exist (the rigging) in the selling of bazillions of dollars of naked positions to drive the physical price down, etc.  See, it's all cool
4.)  And the reason it will never advance past this is that the Eyewash has been applied and it is the very same regulatory bodies manipulating the prices downwards that are the ones and same responsible for regulation.


All fixed.
So no more fucking quesitons or tin foil hat shit, people!

Tall Tom's picture

If you had that in Physical Silver then you would not need to be looking for compensatory damages because the Chickens always return to roost.


Your compensation will be realized at the collapse of the Paper Market and those markets will end up destroyed.


Stay away from paper as it is fraud to begin with. Even that $250,000 is fraudulent as it is a paper claim on future production of Goods and Services...which...ARE IMPOSSIBLE TO PRODUCE.


(That is the problem with Inflating to infinity...The Currency is rendered meaningless and a Force Majeure is declared when it becomes apparent that they cannot Stand and Deliver upon the promises made.)


That is what a currency is after all. It is a claim upon future production.


There is no way that we will ever see $100 Trillion, at today's value of $100 Trillion, in Goods and Services produced in out lifetime. That is the amount of the USA's unfunded liabilities and the supporting Good and Services are impossible to provide.


To make a long story short...


BUY PHYSICAL METAL. Do not play in paper markets as they are Ponzi Scheme, Pie in the Sky, FRAUDS..including the US DOLLAR...THE BIGGEST FRAUD OF ALL.


(But the US Dollar just reflects our social moral DECADENCE so well...)

DoChenRollingBearing's picture

This article is why ZeroHedge adds so much value to those who seek truth and/or are defending their wealth from the predators.

As a non-professional, I am pleased that there are competent pros with the technical skills and the desire to expose this kind of criminality..., which the crooks try so hard to hide.

Bravo to the Tylers.

Took Red Pill's picture

now if only someone would go to jail

Tall Tom's picture

A Hangsman knot at the end of a rope will be better.


Do you want to pay for their imprisonment?

zerozulu's picture

Tribe has their truck loaded. Now every reason to bring gold up. Gold to $5000 my friend.

Bindar Dundat's picture

Who cares what it's value is in dollars!  Really  -- who cares.

An ounce of AG will still only rent you a month in a furnished two bedroom apartment , just like it did in 1902 at $20/month.  Gold is stable it's the fiat that is losing value through inflation .....

When gold is worth $25,000 an ounce it will cost $25,000 to rent a two bedroom apartment for a month.

indygo55's picture

I think he was refering to the "allegation" that Gold and Silver are artificially manipulated down and thus have the potential of experiencing an upward movement that will (temporaraly) shoot past the actual price.

I think the whole thing is a massive fraud and $5000 is widely considered to be an easy target, if even for a moment before settling down to something sustainable.

tocointhephrase's picture

Right now it does not come close to covering a months rent. It did in 2011. And by the way, given I have been in property for 15 years, the amount of dodgy mortgages over the years, zero cash deposits, interest only etc, this is one grossly overvalued market built on hot air. When the bull market in gold and silver resumes it will cover more than a months rent. 50 ozs should buy you a home. That is a little over 4 years of 'rent'. But hey, if a months rent is your price target feel free to cash in early!

Greenskeeper_Carl's picture

that right there is the only thing i have any intention of parting with any of my gold right there. Once this new property bubble pops, which, IF interest rates ever move back to their historical norms, is inevitable, Thats when Im buying. especially in florida, where a lot of houses down here are people's second home, the bubble is even bigger.

fockewulf190's picture

"When gold is worth $25,000 an ounce it will cost $25,000 to rent a two bedroom apartment for a month."


Of course, that all depends on where on Earth your living and what your renting.  If your living in a major first world city or in the nearby suburbs of one, then yes, you are correct.  I am going to be happy with my stack, and far away from any major population areas when the PM´s reset...and if renting a pad costs $25 grand a month in the future, I´ll make sure I´m living somewhere where it costs $5 grand.  The Great Reset is going to be brutal, and stretching your stack for all it´s worth is going to be the name of the game.

artless's picture


But could this be one of those brief periods during a few decade stretch when it's under priced even at 1300/oz?

I do remember when it was 300/oz and thw hypothetical 2 bedroom was renting for around 900.


zerozulu's picture



"An ounce of AG will still only rent you a month in a furnished two bedroom apartment"

Yes, only if you have an ounce of AG.

Tall Tom's picture

An ounce of ounce of Au



Tall Tom's picture

An ounce of AG will still only rent you a month in a furnished two bedroom apartment , just like it did in 1902 at $20/month.


I think that you mean an ounce of Au.


Au is Gold

Ag is Silver

Pt is Platinum

Pd is Palladium.

Hg is Mercury

Fe is Iron

Sn is Tin


Cu is Copper

Pb is LEAD.


(Ammo...You know?)

Mr Pink's picture

So......when do they settle with me?

Never One Roach's picture

Sock it to the shareholders but pleeeeze, don't jail any of the criminals.

MsCreant's picture

^^The elephant in the room^^

They don't dare breathe that truth. To say it undoes EVERYTHING they have been getting away with. These manipulations are crimes and thefts from us all. And we are forced to interface with this system. Everything we buy, gas, milk, stocks, gold, anything at all we buy, we have to interface with this shit. We can trade between us here and there, but those moments are few and far between.

RaceToTheBottom's picture

Plus the government mines a fee from the offending company. Covers paperwork costs...

Wile-E-Coyote's picture

I bought more Silver Friday........ Fuck the bastards.

scottch's picture

AG permiums are quite high - around 8% at APMEX.  Those guys must have been holding the bag when the prices dropped.  AU is still around 3% is 1oz increments.

ZH Snob's picture

tidbits, nothing more.

there will be no change until the present system finishes choking itself off, turns blue and dies.

until then, all we'll get will be fall guys and stories.


ekm1's picture


Jarrett being attacked.

Biden is in civil war with Obama. I suspect it was Biden who leaked to WSJ that Obama had sent 4 secret letters to Khamenei and Khamenei didn't even bother answering.


I don't see Obama finishing the 2nd term in office.

I suspect democrats are ready to join repubs to remove him from office as of new congress.

2/3 of senate needed.

seek's picture

Ordinarily I'd dismiss this, but I think it's going to be really hard to convince the public that people and not Diebold voted Ms. "What difference does it make" into the presidency in 2016 if the don't do some major damage control.

As others have pointed out, if the US were a parliamentary system, a vote like this most recent one would have had Obama resigning the next day.

The setup would be pretty easy, E.O. on amnesty and then resigns. The wall of immigrants heading to the US would create a nice actionable crisis afterwards as well.

ekm1's picture

It is my view that Obama is mentally unstable.

Assuming Obama does not change, not impossible impeachment within first 6 months of 2015.

Just my view.

Tall Tom's picture

Mentally unstable?


THEY ARE ALL MENTALLY UNSTABLE is the answer. To what degree is the question...


(Alex, Mentally unstable Politicians for $1000 please. I just hit the Daily Double? Cool. I will wager everything.)


Really I believe that Joe Biden is more mentally unstable than Obama.


He is the largest obstacle to an Obama Impeachment.


(Even when they were going after Nixon they had the cleverness to remove Spiro Agnew, another politician crook from Maryland, FIRST.)


Joe Biden is the INSURANCE POLICY.

Theta_Burn's picture

@ snob


Now if I manipulated say, my taxes, building permits, or the truth in a court of law, can't I also settle without admitting guilt?

Shouldn't there also be a big fuck all class action suit, trying to recoup all the losses suffered by investers, myself included?

If this dosen't tell you to get heavy with PM's nothing will...


**Failed to note that the manipulation is to the down side, and for that I am greatful....

DoChenRollingBearing's picture

When you get a gift, sometimes it is smart to take it.

Shad_ow's picture

So all those who have not proffitted because of unfair trading will be reimbursed?  


Hahahaha, yeah I am holding my breath.

lordbyroniv's picture


Tinky's picture

Don't forget Trader "every time it drops the gold bugs claim" Dan!

The Duke of New York A No.1's picture

I'm sure Trader Dan would sell his Grandmother if he could make a wooden nickel in the trade.

vincent's picture

Stop Kli. You're gonna hurt Dark Purple Haze'z feelings.

Dan is his first crush since he left The Turd.

indygo55's picture

Dont blame MARTIN ARMSTRONG. He's only doing what he is told. The manipulation is obvious and he doesn't see it? Really??

TeamDepends's picture

Andre and his ilk will soon be receiving "love letters" from all directions.