These Are The 6 Traders Who Were Just Arrested For Manipulating The Gold Market
Content adapted from this Zerohedge.com article :Source
by Tyler Durden
On Monday morning we reported that a number of traders - currently or formerly employed by UBS, HSBC and Deutsche Bank(as usual, no JPMorgan US banks were touched) - would be perp-walked and charged in an unprecedented cross-agency crackdown between the CFTC, DOJ and FBI seeking to punish spoofers of futures. This was confirmed moments ago by a CFTC press release which announced criminal and civil enforcement actions against three banks and six individuals involved in commodities fraud and spoofing schemes.
Here is what got far less publicity: it wasn't just any futures that were spoofed - all the banks and traders busted were charged for spoofing the precious metals market, i.e. gold and silver. We bring this up because there are still the occasional idiots out there who say gold and silver were never manipulated.
The banks in question, and their penalties:
Deutsche Bank will pay a $30 million civil monetary penalty and undertake remedial relief. The Orders finds that "from at least February 2008 and continuing through at least September 2014, DB AG, by and through certain precious metals traders (Traders), engaged in a scheme to manipulate the price of precious metals futures contracts by utilizing a variety of manual spoofing techniques with respect to precious metals futures contracts traded on the Commodity Exchange, Inc. (COMEX), and by trading in a manner to trigger customer stop-loss orders."
UBS will pay a $15 million civil monetary penalty and undertake remedial relief. The Order finds that from "January 2008 through at least December 2013, UBS, by and through the acts of certain precious metals traders on the spot desk (Traders), attempted to manipulate the price of precious metals futures contracts by utilizing a variety of manual spoofing techniques with respect to precious metals futures contracts traded on the Commodity Exchange, Inc. (COMEX), including gold and silver, and by trading in a manner to trigger customer stop-loss orders."
HSBC will pay a civil monetary penalty of $1.6 million, and cease and desist from violating the Commodity Exchange Act's prohibition against spoofing, after an Order found HSBC engaged in numerous acts of "spoofing with respect to certain futures products in gold and other precious metals traded on the Commodity Exchange, Inc. (COMEX). The Order finds that HSBC engaged in this activity through one of its traders based in HSBC's New York office." For those keeping count, this is roughly the 4th time HSBC has been found guilty of manipulating markets after the bank nearly lost its charter and swore it would never manipulate markets again.
And here are the 6 traders who spoof and otherwise manipulated the precious metals market:
- Krishna Mohan
The CFTC today announced the filing of a federal court enforcement action in the U.S. District Court for the Southern District of Texas against Krishna Mohan of New York City, New York, charging him with spoofing (bidding or offering with the intent to cancel before execution) and engaging in a manipulative and deceptive scheme in the E-mini Dow ($5) futures contract market on the Chicago Board of Trade and the E-mini NASDAQ 100 futures contract market on the Chicago Mercantile Exchange.
- Jiongsheng Zhao
The CFTC today announced the filing of a federal court enforcement action in the U.S. District Court for the Northern District of Illinois against Defendant Jiongsheng Zhao, of Australia, charging him with spoofing and engaging in a manipulative and deceptive scheme in the E-mini S&P 500 futures contract market on the Chicago Mercantile Exchange (CME).
- James Vorley & Cedric Chanu
The CFTC announced the filing of a civil enforcement action in the U.S. District Court for the Northern District of Illinois against James Vorley, a U.K. resident, and Cedric Chanu, a United Arab Emirates resident, charging them with spoofing and engaging in a manipulative and deceptive scheme in the precious metals futures markets.
- Jitesh Thakkar & Edge Financial Technologies
The CFTC today announced the filing of a federal court enforcement action in the U.S. District Court for the Northern District of Illinois, charging Jitesh Thakkar of Naperville, Illinois, and his company, Edge Financial Technologies, Inc. (Edge), with aiding and abetting spoofing and a manipulative and deceptive scheme in the E-mini S&P futures contract market on the Chicago Mercantile Exchange (E-mini S&P).
An amusing tangent: recall that according to court docs related to the prosecution of "May 2010" flash crash scapegoat Navinder Sarao, the former S&P spoofer allegedly asked the abovementioned founder of the trading-software company Edge Financial Technologies Inc. to modify a program to allow him to automate some trading functions.
The CFTC and Department of Justice said in their complaint that those modifications were designed to help him spoof the markets more efficiently.
It gets better: as the WSJ reported, the now arrested Jitesh Thakkar, the founder of Edge Financial and a former member of a CFTC technology-advisory committee, said in an interview that the CFTC had sent [Sarao] a letter asking him to retain all documents related to Mr. Sarao.
"I've spoken out against spoofing," he said. "We didn't create anything that does anything illegal."
Two years later Thakkar was arrested for just that, but it also now appears that Thakkar may have used Sarao's algo himself.
Finally, our old friend, Andre Flotron, formerly of UBS, who as we reported on several prior occasions was arrested and charged with gold-rigging after a lengthy career of doing just that at the largest Swiss bank:
The CFTC announced the filing of a civil enforcement action in the U.S. District Court for the District of Connecticut against Andre Flotron, of Switzerland, charging him with engaging in a manipulative and deceptive scheme and spoofing in the precious metals futures markets on a registered entity.
Meanwhile, the S&P500 manipulation by the Fed and spoofing by HFTs continues apace, and will as long as the market keeps levitating because it is only when stocks crash, that the fingerpointing begins. 
A lot of conspiracy theories have turned out to be conspiracy fact , Surprise! The banks manipulate the price of everything. That is the purpose of the stock market. Conspiracy became fact !Back in 2000 I used to talk about gold prices being manipulated and people would either say one of two things: (1) you're fucking nuts, or (2) so why would you want to invest in something that's being manipulated?
Get rid of the middleman!
I would not be surprised if gold takes a huge dive the day people who holds paper gold realizes that it is basically worth nothing and tries to sell it off.
And the rebound after the sell off could bring us to prices far above anything seen before.
Hahah, so they will appear on court (maybe) once or twice and voala - nothing will be done. As far as the gold and silver - I think commodities and Forex are the most manipulated - why? BANKS!
U r right ,nothing will be done.
I hope this stays out of crypto but I think that is just wishful thinking
I really wish the Rticles about bank fines would start with how much they made by doing these schemes. If they paid $30mill but made $60mill then I would think the fines are useless. Who does the fine go to? Not the person who lost money taking the other side of the trades that's for sure
UBS, HSBC and Deutsche Bank huh? None of the major US manipulators on the list so hopefully these people are just the start as the major criminality won't end until the US players are in the crosshairs.
While major international events - such as nuclear tests by the DPRK - affect gold prices and lead to a state of preference for investors to invest their money in this metal, economist Dmitry Speck believes that other more important factors play a crucial role in influencing On the global financial market.
Cantonese translation
"Gold prices have been constantly manipulated since 1993," said German gold market expert Dmitry Speck. According to him, gold prices were manipulated by the media as if it had been started by two malignant traders recently, But this idea is wrong.
"When gold price manipulation began on August 5, 1993, it was the central banks that started this process, specifically the head of the US Central Bank, Alan Greenspan, who did not want to allow the price of gold to rise above $ 400, because he feared that The large increase in gold prices affects the inflation index. "
The expert noted that the US Federal Reserve has arranged an agreement between central banks to keep the price of gold below $ 400. This has been done for several years through sales and loans. @zer0hedge
Leading the manipulation of the world price of gold
"Central banks do not operate on their own, but they work closely with private banking institutions and financial institutions," he said.
«With the help of price fluctuations, enterprises are hitting prices down to push other buyers out of the market. The state is the primary beneficiary of all this, and this is primarily related to the United States and the dollar, because the US dollar - as the main global currency - will look good in this case
Spike explained how this manipulation process actually occurs, noting that this is happening "simply" by "destroying the other competitors." In this case, gold is the main competitor to the currencies dependent on loans, such as the US dollar and the euro, Gold itself exacerbates debt and other economic deficits in the United States.
Secret monetary policy: Why central banks manipulate gold prices? "Spike also analyzes the benefits of the banking system itself as a result of financial manipulation. The expert concludes that the US banking system is the main beneficiary of the manipulation of gold prices.
When gold prices fall, the US dollar rises, and its position looks better than it actually is. Banks can then cut interest rates to reduce inflationary expectations, calm depositors, and suggest lower interest rates for depositors, which in turn makes it easier to obtain a loan. This is beneficial to the United States and, of course, to the banking system, although this approach was one of the main factors that caused the global financial crisis.
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Of course, sir
Thank you for the discussion was useful to me I have gained new information
This kind of crap is the reason why people should buy private cryptocurrencies, right?
You'd have to be a moron to buy something when its price was being manipulated. Since the price of everything except gold has been going up, would we be correct to assume the manipulation was downward? Why would I ever buy something like that?
Whatever the case, those HODLers of bitcoin are looking smarter and smarter every day. I'm told by lots of people 18-34 years old that this kind of stuff just doesn't happen with cryptocurrencies. The 18-23 year olds seem particularlly adamant. They're either right or acting more like kids than adults.
@zer0hedge
Just wait for Traders with the same ethics as these twats try to manipulate cryptos. Its not a matter of if it will happen, it already does. Pump and dumps happen regularly.
Yeah you r right.
Much smaller market so a lot easier to do.
The Gold market is 10 times that of the entire crypto world...and they were able to manipulate that. Imagine what they will be able to do with ETH or LTC.
@zer0hedge...bro Permalink Part of the underlying problem is that there is no sense of irony or shame that the largest PM manipulator of all, JPM, is never touched. Any wonder why ROW wants out of the Dollar system ASAP?Oh, but I forgot that all the US Banks are "..i gave up making Cdn$120k per year to make Cdn$60k per year so I could get into the cigar business in Nicaragua, forget about broads and finally get on the right path to just die in peace...and I'm not sharing any of my secrets with anybody for any price!Unless you wanna buy my cigars, then we can talk..Right side of the trade indeed. The question remains. Just $51 mil in penalties? How about the CFTC imposing penalties so as to make sure no company would ever consider doing this again? Short of that, (and not sending any CEOs to hard time behind bars for long stretches), means that this is just the cost of doing business and that it is okay for this to happen again..thank you for sharing with us
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Gold market manipulation, called also gold price manipulation, can be defined broadly as a purposeful effort to control gold prices. This sort of manipulation exists in financial markets as traders try to influence the markets (in this case, the gold market). It may be responsible for some short-term aberrations in asset prices, including the price of gold. However, there is another, more specific definition. According to the Security and Exchange Commission, manipulation is intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security… [this includes] rigging quotes, prices or trades to create a false or deceptive picture of the demand for a security. A popular belief within the gold investing community is that gold prices are manipulated, generally downwards, in what is described as price suppression.
Although it is good that there was FINALLY some action against corrupt traders manipulating the markets, the simple truth is with so many other offenses of corruption and market manipulation that go without any acknowledgment of wrongdoing or punishment for those caught just makes me think there is some politics behind it that they want to send a message since it really is rare and completely arbitrary who they decide to prosecute.
The rule I see most often followed is if you only screw the public (read Muppets) then no punishment, but if you screw the banking system or the banking elite, you are going to be punished
I agree with u bro.