US Regulator Sues Two UAE Traders For Allegedly Spoofing Gold Futures

The US Commodity Futures Trading Commission (CFTC) sued two gold futures traders from the United Arab Emirates, alleging they engaged in unlawful disruptive trading practices known as “spoofing” by placing bids and offers with the intent to cancel them before execution.

CFTC alleges that between February and April 28, 2015, UAE residents Heet Khara and Nasim Salim placed larger aggregate orders for gold and silver futures contracts opposite smaller orders and canceled the larger orders after the smaller orders were executed. (http://1.usa.gov/1zLQFkI)

Khara and Salim are both traders of CME Group Inc’s gold and silver futures contracts on its Comex exchange in New York. Reuters was not able to immediately contact the traders to comment on the CFTC lawsuit.

Based on their pattern of unlawful spoofing and the potential for dissipation of Defendants’ assets, on May 5, 2015.

A federal judge issued an order freezing and preserving assets under the traders’ control and prohibiting them from destroying documents or denying CFTC staff access to their books and records, CFTC said.

Last week, CME Group had suspended the two traders from its markets for 60 days for allegedly colluding to enter orders repeatedly with no intention of trading, a strategy that has been accused as a key contributor to the 2010 Wall Street flash crash.

The CFTC lawsuit comes just days after CME trader Navinder Sarao was jailed in the UK after the US Justice Department accused him of manipulating markets using spoofing tactics.