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Gold trader bragged about 'how easy' it is to manipulate prices

Section: Daily Dispatches

Indeed, ease of manipulation is precisely the purpose of the gold futures market:

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By Bre Bradhman
Bloomberg News
via Yahoo News, Sunnyvale, California
Wednesday, July 21, 2021

Chat logs introduced as evidence by prosecutors at the Chicago spoofing trial of two former precious-metals traders for Bank of America Corp.'s Merrill Lynch unit shows one of them, Edward Bases, bragging about how easy it is to manipulate prices.

... Dispatch continues below ...

Asante Gold Acquires Key Exploration Land
on Ashanti and Asankrangwa Gold Belts in Ghana

Company Announcement
via Globe Newswire, Omaha, Nebraska
Friday, May 28, 2021

VANCOUVER, British Columbia, Canada -- Asante Gold Corp. (CSE: ASE / Frankfurt: 1A9 / U.S. OTC: ASGOF) reports that it has received notice from the Minerals Commission of Ghana that eight highly prospective concessions covering approximately 314 square kilometers have been recommended for transfer to Asante.

These licenses are comprised of the Diaso (104.1 km2), Juabo (59.2 km2), Manhia (18.69 km2), Dunkwa Gyimigya (32.72 km2), Gyimigya (5.52 km2), Agyaka Manso (40.0 km2), Amuabaka (28.86 km2), and Nkronua-Atifi (24.97 km2) prospecting licenses. All licenses are being acquired as issued by the Minerals Commission from Goknet Mining Co. Ltd. pursuant to the terms of agreement with Goknet dated December 28, 2016.

The concessions were variously explored by Canadian exploration juniors Nevsun Resources, Tri-Star Gold, and Golden Rule Resources in the late 1990s and most recently by PMI Gold Corp. (now Galiano Gold) from 2002 through August 2014, when rights to the land were acquired by Goknet. ...

... For the remainder of the announcement:

On Jan. 28, 2009, when Bases was working at Deutsche Bank AG, he put out bids to buy 2,740 gold futures contracts valued around $244 million over the course of 4 1/2 minutes, according to Maria Garibotti, a vice president at Analysis Group who studied exchange and trading data for prosecutors. More than 98% were canceled without being filled, she said.

On the opposite side of the market, a fellow Deutsche Bank trader Bases coordinated with sold his 170 contracts worth $15,172,500 as the price rose, Garibotti told jurors on Wednesday.

"That does show u how easy it is to manipulate it sometimes," Bases wrote minutes after the trading in a chat message sent to the other Deutsche Bank trader, Cedric Chanu, according to Garibotti. Chanu and another Deutsche Bank Trader, James Vorley, were sentenced last month to a year in prison each for their convictions in 2020 on spoofing charges at a separate trial.

"I f..k the mkt around a lot," Bases said in another message.

Bases and fellow Merrill Lynch trader John Pacilio face federal fraud charges for allegedly spoofing the futures market from 2008 to 2014.

Another episode described by Garibotti involved trades by Bases and Pacilio on Aug. 9, 2010, when both were working at Merrill Lynch.

That day, Bases placed an iceberg order to buy 10 contracts of platinum, with six being filled at placement, she said. Less than 10 seconds after Bases placed that buy order, Pacilio placed an order to sell 205 contracts for $15,856,750, which was almost 90% of what was visible on the exchange order book, Garibotti said. The price went down, and the rest of Bases' order was filled, she said. Less than a second later, Pacilio's sell order was canceled, she said.

Garibotti said employees at Analysis Group put in about 3,000 hours studying data in this case over the course of several years, billing the government $1.2 million for its work.

The defense attorneys have not yet begun cross-examining Garibotti.

In opening arguments Tuesday, Bases' defense attorney told the jury that once her client understood spoofing was illegal, he stopped doing it, and that nearly all the conduct the government identified was before the enactment of the Dodd-Frank Act, which specifically prohibited spoofing.


The case is U.S. v. Bases et al, 18-cr-00048, U.S. District Court, Northern District of Illinois (Chicago).

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