Prosecutors behind a sweeping US crackdown on market “spoofing” scored a big win on Friday when former Deutsche Bank traders Cedric Chanu and James Vorley were convicted of fraud for manipulating gold and silver prices.
A federal jury in Chicago, after three days of deliberations, concluded Mr Chanu and Mr Vorley made bogus trade orders between 2008 and 2013 to illegally influence precious metals prices. The week-long trial was the latest US prosecution of a “spoofing” case since the global market “flash crash” in 2010.
Mr Chanu and Mr Vorley engaged in a classic “bait and switch” by placing orders they never intended to execute and then cancelling them, which “weaponised” the forces of supply and demand to mislead other traders, prosecutor Brian Young told jurors in closing arguments on Tuesday.
Spoofing occurs when a trader enters buy or sell orders and then cancels them before they are executed, creating a false market indicator that can generate profit by taking the opposite position. While cancelling orders isn’t prohibited, the 2010 Dodd-Frank Act made it illegal to place orders with no intention of executing them.
Transcripts of messages the two traders sent show they knew what they were doing was wrong, Mr Young said. In one instance, Mr Vorley wrote: “This spoofing is annoying me. It’s illegal for a start”.
The star witness at the trial was their former Deutsche Bank coworker, David Liew, who told the jury he learned from Mr Chanu and Mr Vorley how to use spoof trades to manipulate prices. Mr Liew faces his own criminal charges and agreed to cooperate with the government.
Mr Chanu was convicted on seven fraud counts and Mr Vorley on three counts, while they were found not guilty of other charges, including conspiracy. Each count carries a maximum penalty of 30 years in prison, though US District Judge John Tharp said the government would seek about four or five years. Sentencing was set for January 21, and both men remain free on bail.
Mr Vorley’s attorney, Roger Burlingame, said he’ll appeal against the conviction. He called the prosecution “misguided” because his client’s trading was “well within the law”.
“It was a compromise verdict by a jury that three times declared it was deadlocked, deliberating in the face of a Covid scare,” Mr Burlingame said. The jury had been reduced to 11 after one juror complained of coronavirus-like symptoms and was dismissed. “The record is clear, there was no fraud. The compromise conviction will not stand.”
Mr Chanu’s attorney, Michael McGovern, said in an email that he was “gratified that the jury unanimously acquitted Cedric on the conspiracy and other charges, and we intend to continue the fight as to the remaining charges”.
The prosecutor declined to comment after the verdict.
Since anti-spoofing laws passed under the Dodd-Frank financial reforms a decade ago, the US has prosecuted about a dozen criminal cases, including Navinder Sarao, the British day trader linked to the 2010 “flash crash” that erased $1 trillion (Dh3.67tn) in market value.
The Commodity Futures Trading Commission also has stepped up civil complaints and reached many settlements, including a $30 million deal with Deutsche Bank in 2018. JPMorgan Chase is poised to pay close to $1 billion to resolve market manipulation investigations by US authorities into its trading of metals futures and Treasury securities, Bloomberg reported on Wednesday.
While prosecutors have secured several guilty pleas in spoofing cases – including Mr Liew, Mr Sarao and others – they’d had mixed results at trial.
In 2015, Michael Coscia was convicted in Chicago and sentenced to three years in prison. In 2018, Andre Flotron was acquitted after a federal judge in Connecticut threw out most of the charges on the grounds that the case should have been brought in Chicago, where the trading occurred. Last year, the case against Chicago programmer Jitesh Thakkar, the first non-trader prosecuted under anti-spoofing laws, ended in a mistrial and charges were dropped.
Defence lawyers for Mr Chanu and Mr Vorley didn’t present any witnesses at the trial. While questioning prosecution witnesses, they emphasised how difficult it is to determine criminal intent for “spoofing” in competitive global markets where traders keep strategies secret and try to outmanoeuvre rivals. The defence team cited several examples of legal trading practices that allow market players to hide their intentions from everyone else.
“If you fake a pass and run the ball, that’s competition, not fraud,” Mr Burlingame told the jurors during closing arguments on Tuesday. Every order placed by Vorley was “100 per cent real”, he said.
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England v South Africa Test series:
First Test: at Lord's, England won by 211 runs
Second Test: at Trent Bridge, South Africa won by 340 runs
Third Test: at The Oval, July 27-31
Fourth Test: at Old Trafford, August 4-8
Lewis Hamilton in 2018
Australia 2nd; Bahrain 3rd; China 4th; Azerbaijan 1st; Spain 1st; Monaco 3rd; Canada 5th; France 1st; Austria DNF; Britain 2nd; Germany 1st; Hungary 1st; Belgium 2nd; Italy 1st; Singapore 1st; Russia 1st; Japan 1st; United States 3rd; Mexico 4th
Best Foreign Language Film nominees
Capernaum (Lebanon)
Cold War (Poland)
Never Look Away (Germany)
Roma (Mexico)
Shoplifters (Japan)
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Three-day coronation
Royal purification
The entire coronation ceremony extends over three days from May 4-6, but Saturday is the one to watch. At the time of 10:09am the royal purification ceremony begins. Wearing a white robe, the king will enter a pavilion at the Grand Palace, where he will be doused in sacred water from five rivers and four ponds in Thailand. In the distant past water was collected from specific rivers in India, reflecting the influential blend of Hindu and Buddhist cosmology on the coronation. Hindu Brahmins and the country's most senior Buddhist monks will be present. Coronation practices can be traced back thousands of years to ancient India.
The crown
Not long after royal purification rites, the king proceeds to the Baisal Daksin Throne Hall where he receives sacred water from eight directions. Symbolically that means he has received legitimacy from all directions of the kingdom. He ascends the Bhadrapitha Throne, where in regal robes he sits under a Nine-Tiered Umbrella of State. Brahmins will hand the monarch the royal regalia, including a wooden sceptre inlaid with gold, a precious stone-encrusted sword believed to have been found in a lake in northern Cambodia, slippers, and a whisk made from yak's hair.
The Great Crown of Victory is the centrepiece. Tiered, gold and weighing 7.3 kilograms, it has a diamond from India at the top. Vajiralongkorn will personally place the crown on his own head and then issues his first royal command.
The audience
On Saturday afternoon, the newly-crowned king is set to grant a "grand audience" to members of the royal family, the privy council, the cabinet and senior officials. Two hours later the king will visit the Temple of the Emerald Buddha, the most sacred space in Thailand, which on normal days is thronged with tourists. He then symbolically moves into the Royal Residence.
The procession
The main element of Sunday's ceremonies, streets across Bangkok's historic heart have been blocked off in preparation for this moment. The king will sit on a royal palanquin carried by soldiers dressed in colourful traditional garb. A 21-gun salute will start the procession. Some 200,000 people are expected to line the seven-kilometre route around the city.
Meet the people
On the last day of the ceremony Rama X will appear on the balcony of Suddhaisavarya Prasad Hall in the Grand Palace at 4:30pm "to receive the good wishes of the people". An hour later, diplomats will be given an audience at the Grand Palace. This is the only time during the ceremony that representatives of foreign governments will greet the king.
Adele: The Stories Behind The Songs
Caroline Sullivan
Carlton Books
Temple numbers
Expected completion: 2022
Height: 24 meters
Ground floor banquet hall: 370 square metres to accommodate about 750 people
Ground floor multipurpose hall: 92 square metres for up to 200 people
First floor main Prayer Hall: 465 square metres to hold 1,500 people at a time
First floor terrace areas: 2,30 square metres
Temple will be spread over 6,900 square metres
Structure includes two basements, ground and first floor
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
Last five meetings
2013: South Korea 0-2 Brazil
2002: South Korea 2-3 Brazil
1999: South Korea 1-0 Brazil
1997: South Korea 1-2 Brazil
1995: South Korea 0-1 Brazil
Note: All friendlies
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
Teaching in coronavirus times
ESSENTIALS
The flights
Emirates flies direct from Dubai to Rio de Janeiro from Dh7,000 return including taxes. Avianca fliles from Rio to Cusco via Lima from $399 (Dhxx) return including taxes.
The trip
From US$1,830 per deluxe cabin, twin share, for the one-night Spirit of the Water itinerary and US$4,630 per deluxe cabin for the Peruvian Highlands itinerary, inclusive of meals, and beverages. Surcharges apply for some excursions.
Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
What went into the film
25 visual effects (VFX) studios
2,150 VFX shots in a film with 2,500 shots
1,000 VFX artists
3,000 technicians
10 Concept artists, 25 3D designers
New sound technology, named 4D SRL
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
Brief scores:
Toss: South Africa, chose to field
Pakistan: 177 & 294
South Africa: 431 & 43-1
Man of the Match: Faf du Plessis (South Africa)
Series: South Africa lead three-match series 2-0
Hotel Silence
Auður Ava Ólafsdóttir
Pushkin Press
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
The specs: 2019 Mercedes-Benz C200 Coupe
Price, base: Dh201,153
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Nine-speed automatic
Power: 204hp @ 5,800rpm
Torque: 300Nm @ 1,600rpm
Fuel economy, combined: 6.7L / 100km
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GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
South and West: From a Notebook
Joan Didion
Fourth Estate
The biog
Name: Samar Frost
Born: Abu Dhabi
Hobbies: Singing, music and socialising with friends
Favourite singer: Adele
