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(Kitco News) - The trial of two precious-metals traders who used to work for Bank of America's Merrill Lynch unit showed one of them, Edward Bases, bragging about how easy it was to manipulate prices.
According to Maria Garibotti, a vice president at Analysis Group who studied exchange and trading data for prosecutors, when Bases was working at Deutsche Bank AG, he put out bids to buy 2,740 gold futures contracts valued at around $244 million over the course of four and a half minutes. Incidentally, more than 98% were canceled without being filled, she said.
As the prices rose in favor of the trader's Bases sold his 170 contracts valued at $15,172,500, Garibotti told jurors on Wednesday.
Bragging about what he had done Bases said “that does show u how easy it is to manipulate it sometimes,”. Cedric Chanu and James Vorley who received the messages were sentenced last month to a year in prison each for their convictions in 2020 on spoofing charges at a separate trial. Bases also added “I f..k the mkt around a lot,”.
During another example, Bases, and Pacilio were working at Merrill Lynch and Bases placed an order to buy 10 contracts of platinum, with six being filled at placement. 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%. The price subsequently went down, and the rest of Bases’ orders were filled. Less than a second later, Pacilio’s sell order was canceled.
The next prosecution witness is expected to be Harnaik Lakhan, a trader who worked with Pacilio and Bases and is cooperating with the government. The trial continues.