The US Commodity Futures
Trading Commission (CFTC) has fined two gold futures traders from the UAE over allegations that they schemed to manipulate the precious metals futures market through a trading tactic known as ‘spoofing’.
Heet Khara and Nasim Salim, both are former traders of CME Group’s gold and silver futures contracts, were hit by $2.7 million in penalties for engaging in disruptive trading practices by placing bids and offers with the intent to cancel them before execution. The abuses of United Arab Emirates residents allegedly occurred between February 2015 through at least April 28, 2015.
Spoofing, in general, is a practice in which a trader floods the market with fake orders by entering and quickly canceling large buy or sell orders on an exchange, in order to fool other traders into thinking that the market is poised to rise or fall.