This shows 'how easy' it is to manipulate the gold market - trader's chat logs
Gold trader's chat logs were introduced as evidence during a Chicago spoofing trial of two former precious metals traders for Bank of America Corp's Merrill Lynch, revealing comments on "how easy" it is to manipulate the precious metals market.
The chat logs are related to an event that happened on January 28, 2009. The messages show the precious metals trader Edward Bases, who at the time was working for Deutsche Bank AG, boasting of how easy it is to manipulate the gold market.
On January 28, 2009, Bases put bids out to purchase 2,740 gold futures contracts valued at $244 million over four-and-a-half minutes, Bloomberg reported, citing Analysis Group vice president Maria Garibotti, who analyzed the trading data for prosecutors on the case. More than 98% of that order was canceled without being filled, Garibotti noted.
And as gold prices rose, another Deutsche Bank trader, who Bases was working with, sold 170 contracts valued at $15,172,500 at the same time, Garibotti testified on Wednesday.
"That does show u how easy it is to manipulate it sometimes [sic]," Bases wrote in the chat message to the other Deutsche Bank trader Cedric Chanu just minutes after the trade, Garibotti stated.
Last month, Chanu was sentenced to one year in prison in a separate spoofing case along with another Deutsche Bank trader James Vorley.
Another chat message from Bases said: "I f..k the mkt around a lot [sic]."
Bases is currently on trial along with another Merrill Lynch trader John Pacilio in the U.S. v. Bases et al case, 18-cr-00048, U.S. District Court, Northern District of Illinois. The two face charges for allegedly spoofing the futures market between 2008 and 2014.
In her testimony, Garibotti described another instance of alleged spoofing, where Bases placed an order to purchase ten platinum contracts on August 9, 2010, with only six of those being filled at placement.
Ten seconds after that, Pacilio put in order to sell 205 contracts for $15,856,750. As the price dropped, Bases' other four contracts were filled, while Pacilio's sell order was canceled seconds later, Bloomberg reported, citing the court proceedings.