Dear CFTC: Here Is Today's Illegal "Spoofing" In Gold Futures

Tyler Durden's picture

The last time we presented unmistakable spoofing in gold futures on April 28 of this year, which happened just days after the CFTC came down on Nav Sarao as the scapegoat for the May 2010 flash crash in which he was accused of spoofing the E-mini future and as a result has been in prison ever since - it resulted, literally 2 days later, to the CME accusing Nassim Salim and Heet Khara of rigging the gold market using precisely this manipulative method.

The CME said on May 1:

[O]n multiple trade dates during the time period of March 1, 2015 through April 28, 2015, Salim engaged in a pattern of activity in which he repeatedly entered orders or layered multiple orders for Gold and Silver futures contracts without the intent to trade. Specifically, Salim entered these orders or layered multiple orders to encourage market participants to trade opposite his smaller orders resting on the opposite side of the book. After receiving a fill on his smaller orders, Salim would then cancel the resting order or layered multiple orders that he had entered on the opposite side of the order book.

 

Salim introduced Heet Khara (“Khara”), who is also the subject of a summary access denial action, to his first FCM and Salim had an account at the second FCM at which Khara traded in a disruptive manner. Further, it appears that on multiple occasions Salim and Khara coordinated efforts to engage in disruptive activity. In an example from April 28, 2015, Salim entered small-lot orders on one side of the market in Gold futures, after which Khara entered large orders on the opposite side. When Salim’s small orders were filled, Khara canceled the large orders. Salim has not responded to correspondence from the Exchange.

Since then there was little gold spoofing to note, perhaps because there was no need to spoof gold lower as a result of the sharp decline in gold prices, punctuated by last Sunday's brutal bear raid which took place out of New York just before China opened on Monday morning, which halted the CME gold futures market not once but twice.

Until today.

Considering today's price action, if one were asked whether today's spoofing would take place on the bid or ask side, one would almost certainly be inclined to guess the "bid" considering the gradual rise in gold prices even as stocks are sliding.

One would be wrong.

As Nanex once again shows, having captured the exact "spoofing" moment, the action was all on the ask side, with a "spoofer" first representing a large sell order, and sending gold lower after 2:41pm, which remains on the order book, but which promptly vanishes once the actual price of gold crossed into the spoofer's "ask" following a subsequent ramp at 4:51pm.

 

Was the intention of today's spoofer to keep and push the price of gold under $1,100 and keep it there to avoid breakouts (where it remains since breaking above $1,100 briefly)? We don't know with certainty but we are confident that both the CME and CFTC will get right on this and give all those who believe in "fair and efficient" markets the answer, as well as charge the guilty spoofer to the full extent of the anti-manipulation law.

Or maybe prison cells and 100+ year sentences are only reserved for those who dare to spoof the "wealth effecting" S&P500 lower?

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kliguy38's picture

Buy NFLX......that's what all the retail noobs are doin'

NoDebt's picture

How has Nanex excaped being shut down?  You would think some HFT firm would have bought them just to put them out of business.

I guess that only happens when somebody starts paying attention to their data.  

Dr. Engali's picture

What's a Nanex? And what are all those scribbly lines in the middle of the article??

Bilderberg Member's picture

"Illegal" is so harsh..."frowned upon" is more appropriate.

SMG's picture

Will there ever be a day where widespread fraud such as this ISN'T the norm?

CounterPartyVice's picture

Dear ZH, thank you for your submission but we are currently running short on basement kids to throw under the bus.

Stuck on Zero's picture

It's only illegal if you get caught - and haven't saved enough to pay off the regulators.

Divine Wind's picture

 

 

 

Funny how Martin Armstrong scoffs at the notion that the gold market is manipulated.

I have tremendous respect for the guy, but I get the sense on this topic that he is on a leash.

Bullionaire's picture

ConTROLLed opposition. Ignore poor Marty.

enforcer92677's picture

Can the gold index system declare self help?

 

Several times a day?

 

 

Pooper Popper's picture

Stay on these cheating Fuckers Tyler.

Great Job!!

Dr. Engali's picture

It's 3:30 on a Friday. Time to go spoof me a few beers.

vq1's picture

Ill give you a beer for $2

 

... jk 5$ now. 

B2u's picture

Where I live beer is $1.50 during Happy Hour !!!

 

Gambit's picture

Lucky you!!! Stuck with $6 beers 

Crash Overide's picture

Total bullshit, you can't spoof a free market... gosh

no1ninja's picture

Market is a lot "Free'er" when you are close to the central banks. 

Ancona's picture

It's all good, 'cause it's almost beer o'clock. Fuck it, I'm going home.

Soul Glow's picture

Dear CFTC,

Go fuck yourselves.

:)

KnuckleDragger-X's picture

Closing down the open call trading pits has made things so much better since nobody ever cheats.......

JenkinsLane's picture

Gold OpEx Tuesday. I would imagine if someone were to mount another Dr Evil attack before then, driving the

closing price below $1080, a hell of a lot of options would then be worthless.

Jtrillian's picture

At what point will the CFTC get serious and go after the worst offenders (hint, they are the big banks and hedge funds)?

Answer: Never - as long as Wall St. funds the campaings and writes their own financial regulations. 

More importantly, when will the CFTC and SEC get serious and hire Eric Hunsader?  This guy is doing your damn job!!!

A one second execution rule would prevent this HFT spoofing and wash trades.  Just sayin'.

Ham-bone's picture

Best guess is the rise of PM's as the only thing of value and the only true money will not be seen on any screen or any "market".  Once the Fed broke the bond markets, it was just a matter of time til all "Markets" turned to pure propaganda representing some paper BS and true supply / demand and value of PM's is something entirely else. 

Just stop looking for the "breakout" of gold or silver that is priced on the COMEX to suddenly rise or take off...just won't happen.  No bond vigilantes, no stock market collapse.  The market will "break" or be closed before PM's are allowed to take off or stocks to fall or bonds to go bidless.  But PM's value will become very evident.

Sages wife's picture

Wiseguy. No, really, wise guy. The game will not be played under any other rules.

pebblewriter's picture

Gold futures hit a strong technical support level overnight.  I'm guessing TPTB didn't want the kind of rebound that might normally occur.

http://pebblewriter.com/update-on-gold-jul-24-2015/

no1ninja's picture

Welcome to a rigged market.  

 

This is why the system is heading for a catastrophic failure, the custodians just can't keep their hands out of the cookie jar. 

Tursas's picture

Great but I doubt these criminals belong to "our group" and get a handshake and instructions how to be more careful next time!

Jameson18's picture

July 28 is a delivery day what did you think would happen today

Atomizer's picture

From Girl Friday typing memos, to being hired for Hillary Clinton Foundation. 

http://www.cftc.gov/About/Commissioners/GaryGensler/index.htm

TeethVillage88s's picture

The markets are like the Clearing Houses and the Banks... Pretty much Self-Regulatory Organizations.

Which is like our Lawyers and Congressmen too.

MrBoompi's picture

If the spoofing was done at the behest of the global financial elite it is considered a legal activity.  And if a big enough stink is made about it they might give someone a $2 fine to appear tough on crime.  

Yen Cross's picture

  This stuff happens in F/X all the time. Buyers or sellers line up with orders after macro releases and place orders in the opposite direction of the market move.

  Just before the market hits their orders they get canceled  and all the retards that thought they got a good fill get "pile drived" up or down to the next big S/R levels.

Madcow's picture

Anyone who can't prove they've committed securities fraud will be charged as a terrorist and sent to prison.

frankly scarlet's picture

China has lots of gold; as does Russia and the new SCO member India. So what are the chances gold gets slaughtered in manipulation as part and parcel of the Asian Pivot and general economic war between the Imperium and the BRICS?

no1ninja's picture

They are doing their darndest but having a hard time pushing it below $1000... my bet is they are sweating this more than the gold bugs. 

Mini-Me's picture

For the country as a whole, the blatant manipulation of PMs is incredibly damaging, as it allows the financial elite to extend their criminal Ponzi scheme.

For me personally, I hope they continue with their little games.  I am aggressively converting their useless green paper into real money.  Put PMs on sale just a little while longer, guys!

Eventually, the only owners of gold and silver will be those who understand what is going on and won't be capitulating.  When they run out of physical, their game ends.  That's when the real fun begins.

q99x2's picture

Pretty sure the ones doing the spoofing run the CFTC.

Renfield's picture

Tyler (and Nanex!), articles like this is how I keep my few remaining strands of sanity in a world centrally planned by organised crime. Thank you for insisting on reporting the reality of market propaganda, shaming the MSM propaganda networks and criminal 'regulators' in their face. I don't know how you manage to keep this up month by month and year by year, but when this looooong collapse finally settles out, I am confident that you will get the recognition you have long deserved. (And as your shadow influence already shows. Right, JPig, Goldman Suchs, and Fed readers?)

TeethVillage88s's picture

Who is that new Lady we are pinning such high hopes for... Loretta Lynch, US AG, Chief of DOJ.

Alicia Anne Garrido Limtiaco, Guam.
Bill Nettles, District of South Carolina
Preet Bharara, New York State
Kelly T. Currie, New York State
Deirdre M. Daly, Connecticut
Zachary T. Fardon, Illinois
James A. Lewis, Illinios

But I guess I need the names of the Heads of Financial Crimes.

Robert J. Holley, Chicago SAIC
Diego Rodriguez, NYC ADIC

And what are the FBI Heads names...

Director – James B. Comey
Deputy Director – Mark F. Giuliano
Associate Deputy Director – Kevin L. Perkins
Chief of Staff/Senior Counselor – Jim Rybicki

Kind of hard to find who is the Financial Crimes Director.

- Which is weird since 2008 was a Global Financial Crisis caused by Wall Street Fraud

I guess we have to look to the chief of Cyber Crime since most finance is Wire Fraud.

Criminal, Cyber, Response, and Services Branch
- Executive Assistant Director – Robert Anderson, Jr.

pndr4495's picture

Some criminals are incorrigible. The ouster of Brooksley Born by Summers - Rubin - Greenspan - and Levitt should be examined for any conflicts of interest , if only to place blame for the evolution of these broken markets - TOO LATE TO PROSECUTE THEM. I wonder if any of those money men have a chunk of an HFT firm. 

Ajax_USB_Port_Repair_Service_'s picture

When the sh*t hits the fan, supply and demand will determine the 'true' price of pm's. All this right now is just 'noise'.

mijev's picture

I guess I'll watch the sunday night Asia open with a little trepidation.