In the aftermath of the Nav Sarao scapegoating farce, one week ago Zero Hedge decided to give the confused CFTC a helping hand and launched a daily series highlighting the constant spoofing and "manipulation" (in the CFTC and DOJ's own words) that takes
place in every asset class, but mostly in the E-mini futures ("
Dear CFTC: This Is The Market Manipulating "Spoofing" Taking Place In The E-Mini Just Today ").
Virtually every day since then we presented the "regulators" at the commodity trading commission a clear example of stock market manipulation, with the exception of Tuesday, when with the exclusive help of
Nanex , we showed a clear case of gold spoofing.
This is what
we said on April 28 :
Here (courtesy of Nanex ) are
several examples in the June 2015 Comex Gold Futures this morning. All
times are Eastern Daylight. In each of these cases, no trades (or a
tiny few) executed against the large "spoof" order. You can see how
prices were influenced by the sudden appearance (and disappearance) of
these large, outsized orders.
1. June 2015 Comex Gold
Note how large buy and sell orders push prices up and down.
2. Another set of instances appear about 50 minutes after the first set (shown in chart 1).
3. Another set of spoofing instances appear about an hour after the second set (shown in chart 2).
You're welcome CFTC — it's the least we can do.
Best wishes,
Zero Hedge
Reminder: We won't stop this until you are forced to address the
glaring hypocrisy and utter incompetence of everyone involved in the
regulation of market microstructure.
Much to our dismay, overnight we learned that while the CFTC
continues to be very, very confused and challenged by all those lobby
payments by the world's "liquidity providing" HFTs and ignores
all documented
evidence of manipulation, the Chicago Mercantile Exchange - owner of
the futures exchange wheer the bulk of modern manipulation takes place -
did read this evidence of manipulation, and decided to immediately take action,
suspending two traders for placing the manipulative "spoofing and layering" trades profiled here three days ago
which were virtually identical to the ones that got Navinder Singh
Sarao into headlines around the world last week. Except, of course, the
asset class manipulated was gold. And, perhaps what's far worse, the
manipulation sent the price of gold briefly higher.
The names of the perpetrators: perhaps not surprisingly, Heet Khara
and Nasim Salim. Extend to Navinder Sarao and a pattern emerges...
This is
the full CME release :
NOTICE OF SUMMARY ACCESS DENIAL ACTION: COMEX 15-0103-SA-1
NON-MEMBER:
NASIM SALIM
CME RULE: 413. SUMMARY ACCESS DENIAL ACTIONS (in part)
A. The Chief Regulatory Officer or his delegate, upon a good faith
determination that there are substantial reasons to believe that such
immediate action is necessary to protect the best interests of the
Exchange, may order that: 1) any party be denied access to any or all
CME Group markets; 2) any party be denied access to the Globex platform;
3) any party be denied access to any other electronic trading or
clearing platform owned or controlled by CME Group; or (4) any Member be
immediately removed from any trading floor owned or controlled by CME
Group.
FINDINGS
On April 30, 2015, CME Group’s Market Regulation Department (“Market
Regulation Department”), through its Chief Regulatory Officer, summarily
denied Nasim Salim (“Salim”) direct and indirect access to all CME
Group markets, the CME Globex electronic trading platform, any other
electronic trading or clearing platform owned or controlled by CME
Group, and all trading floors owned or controlled by CME Group. The
summary access denial prohibits trading, placing orders, and controlling
or directing the trading for any person or entity in any CME Group
exchange product. The summary access denial further prohibits the
affiliation or business dealing with any member or member firm of CME,
CBOT, NYMEX, or COMEX.
CME Group’s Chief Regulatory Officer’s summary access denial of Salim
was based upon the findings of an investigation conducted by the Market
Regulation Department, which revealed that on 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.
The foregoing conduct, as well as Salim’s failure to cooperate with
the Exchange, present a good faith determination that there are substantial
reasons to believe that such immediate action is necessary to protect
the best interests of the Exchanges and the marketplace.
ACCESS DENIAL:
Pursuant to Rule 413, this access denial will remain in effect for 60
days, commencing on the effective date below and continuing through and
including June 29, 2015, unless the Chief Regulatory Officer or his
delegate provides written notice that this access denial will be
extended for an additional period of time.
We expect the CFTC and the DOJ to unleash the wrath of god now that
the CME showed them how gold manipulation works, something they figured
out by
looking a this article .
And while we are delighted that yet one more alleged case of gold
manipulation is now confirmed, we are curious if the CME, CFTC and DOJ
will also prosecute instances of gold manipulation when the ultimate
outcome is the price of gold going lower instead of higher, such as the
one documented in "
Vicious Gold Slamdown Breaks Gold Market For 20 Seconds ", "
Stop Logic" Gold Slam Was So Furious It Shut Down CME Trading Again " and on countless other occasions most of which have been duly documented on this website.
Finally, we wonder: will the CME, CFTC, DOJ, and FBI pursue as
promptly all those instances of constant S&P 500 manipulation and
spoofing we
profiled over the past week in particular ,
and over the past 6 years in general? Or was this merely another
"Sarao" case when several (non-Caucasian) traders are scapegoated by the
regulators, with the naive expectation that investors will suddenly
assume the market - in this case that of gold - is no longer rigged?
