By Angela Chen
The U.S. Commodity Futures Trading Commission charged two United
Arab Emirates residents this week with attempting fraud in the gold
and silver futures markets.
According to the CFTC, Heet Khara and Nasim Salim tried to
"spoof" the markets. Between February and April of this year, the
defendants placed large aggregate contract orders on the Commodity
Exchange Inc. market alongside smaller ones, then canceled the
larger ones after the smaller ones were finished, the regulator
said.
Their behavior was identified by CME Group Inc.'s
market-regulation department.
"Spoofing" is an illegal type of market manipulation that works
like bluffing: A trader places big orders for stocks, bonds or
futures to get others to think the price is going up or down. The
spoofer then immediately cancels those orders and puts in opposite
orders to take advantage of those traders.
The CFTC has filed a civil enforcement action in U.S. District
Court in New York. A judge has issued an order freezing and
preserving assets under the defendants' control.
A hearing on the CFTC's motion for a preliminary injunction is
set for May 19.
Write to Angela Chen at angela.chen@dowjones.com
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