This week, the Department of Justice announced the sentences of two additional Wall St traders in a decades long price fixing scheme to manipulate the price of precious metals.
According to court documents, the defendants, Edward Bases, 61, of New Canaan, Connecticut, a former senior trader who worked at both Deutsche Bank and Bank of America in New York and the second trader, John Pacilio, 59, of New York, who worked as a senior trader at Bank of America and Morgan Stanley in New York, were both sentenced to one year plus one day in prison.
Both traders manipulated precious metals market prices up or down by placing large “spoof” orders in the precious metals futures markets that they never intended to fill. The convictions show that they intentionally manipulate prices for their own gain and for the banks’ gain.
The men defrauded other traders on both the Commodity Exchange Inc. (COMEX) and the New York Mercantile Exchange Inc. (NYMEX), both of which are operated by the CME Group Inc.
Both men were convicted at trial in August 2021 of conspiracy to commit wire fraud and multiple counts of wire fraud affecting a financial institution. Pacilio was also convicted of commodities fraud.
Each were sentenced to one year and one day in prison.
The fake orders that these traders performed intended to induce other traders to buy or sell at prices, quantities and times that they otherwise would not have traded by creating the false appearance of supply and demand. At times, the traders would place hundreds, and in some cases, thousands of orders that they had no intention of fulfilling.
These convictions stem from a broader, long-lasting investigation by the SEC and FBI into commodities market manipulation practices by Wall Street banks and brokerage trading firms.
