DUBAI: Two traders from the UAE are being sued by United States regulators over claims they were “spoofing” gold and futures markets by placing bids and offers they intended to cancel before execution.
Heat Khara and Nasim Salim, suspended for 60 days by the US futures company CME Group last week, should be permanently barred from trading and fined over their illegal profits, the US Commodity Futures Trading Commission (CFTC) said yesterday in a complaint in Manhattan federal court.
The practices they are accused of are similar to those alleged in the case against Navinder Singh Sarao, the British trader facing US charges of manipulating futures markets for five years and contributing to the 2010 flash crash.
Mr Khara and Mr Salim appeared to act “in a coordinated fashion”, as recently as April 28, entering orders for gold and silver futures they never intended to execute, the CFTC alleged.
Feigning interest in completing a trade is discouraged because it can drive prices in directions they would not otherwise move.
“Today’s action makes clear that the CFTC will partner with self-regulatory organisations to find and swiftly prosecute those who engage in such disruptive trading practices, wherever they may be,” said the CFTC enforcement director Aitan Goelman.
On Tuesday, the US district judge Deborah Batts issued an order freezing and preserving assets under the control of both Mr Khara and Mr Salim and prohibiting them from destroying documents or denying access to the CFTC’s staff to their books and records, regulators said.
Judge Batts also scheduled a May 19 hearing for a permanent order barring the two from trading, according to the CFTC.
While both Mr Khara and Mr Salim were told by regulators that they should cease all trading and not try to withdraw funds, Mr Khara responded to an email seeking to withdraw funds and close the account, the CFTC said.
Mr Khara later falsely told one of the merchants that the CME had authorised the closing of the account and the return of funds, the CFTC alleged in the complaint. Mr Salim did not respond to regulators’ messages, according to the complaint.
Mr Khara and Mr Salim, or lawyers for each, could not be reached for comment on Tuesday.
The CFTC, which is CME Group’s primary US regulator, last year said CME was taking too long to complete investigations of improper trading.
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