Interestingly, if there is a basis for this 990N fraud story making the rounds, the "commercials" have taken a big short against both the SP e-minis (81,042), and S&P (19,942). Commercials also short 109,932 ND100 e minis. Time for 990N (and the market)to get busted up?
More on "990N" fraud
From the Prudent Bear Chat Forum:
NEW 6/21/2004 1:21:24 PM
I read the excerpt on 990N. I am one of the biggest
traders of the emini S&P in the world as far as
contracts traded per day and I have been watching 990
manipulate the market now for seven months. The thing
is I don't think your guys on the floor even know the
half of it.
The reason this guy has been able to control the
market is because he has been crossing orders with
himself for months now to make the market appear as if
it were trading in a certain direction, mostly long,
and eventually gets the market to trade at certain
price levels and then gets the support he needs.
This is an email I wrote someone a month ago about
this looking for help...
I am actually writing you to alert you to this
complete market manipulation and to see if you had any
pull to get the word out to different traders and the
media. I am one of the biggest S&P traders in the
world as far as volume per day in that I average over
40,000 round turns per day on the screen in the emini.
I tell you this because that is how I know one house
is completely manipulating the market everyday because
of all the trades I do with this guy. I know it sounds
hard to believe that one person can control a world
market but trust me that is what is occurring. He
works for the firm Gelber which is house 990.
This is the basic premise for his game. He waits until
the market is relatively slow, around 9:30 to 10:00
everyday, usually when the "paper trade" starts to
subside then he begins a theme, mostly always long and
he begins to buy. He is always looking for
confirmation of his theme with what other people are
doing.
When the market stops trading in his direction he then
drops in a offer of 300 to 700 which he sees if anyone
is interested in buying it. If there is no interest he
then buys the order from himself, with the order
actually trading. He does this enough times until he
attracts other buyers which then hits price points and
the market runs violently in his direction.
I am sure I do not have to tell you that this is
completely illegal to do. He started doing this with
300 lots back in November, now he has made so much
money doing it that he is up to 2000 lots. He is
completely in control of the market (illegally) the
majority of the time.
My firm and I have contacted the Merc on three
different occasions with video proof that I recorded
of my trading. It shows blatantly this guy crossing
his orders thousands of times a day. The first person
we talked to in compliance admitted that he saw
something there when they reviewed the video of the
trades I taped of him. He was mysteriously fired the
next day.
We then came up with more examples for them to review
and in the beginning claimed he wasn't doing it. We
called them a third time, this time talking to the
head of compliance and he finally admitted that they
had the guy under investigation because they saw
something, but in the meantime he is still allowed to
trade and make millions until their "investigation" is
concluded.
They obviously love the volume the guy is putting up
and how it makes the emini S&P look from a standpoint
of a liquid market. But if the public had knowledge of
what this guy was doing I don't think they would be
too impressed with the liquidity.
There is obviously some kind of cover-up. Do any of
the pit traders you know have knowledge this is
happening? And do you have any advice on how I can
anonymously get the word out with what this guy is
doing? I know you are not a true tick by tick
"scalper," but this is getting to the point where it
is starting to effect everyone in the marketplace.
Please let me know what you think. |
