"When Gold Goes Above 1430 We Whack It"

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Mladen Rakic
Mladen Rakic  
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As it goes in silver, so it goes in gold. In London at least. 

In a bid to have UBS reinstated as a defendant in a London Gold Fix antitrust lawsuit, plaintiffs documents submitted to a New York Court last week include explosive chat room transcripts of UBS and traders from different banks encouraging each other to “push,” “smack,” and “whack” gold prices.

The transcripts are equally as startling as those described of banks of the London Silver Fix and UBS given to the court the previous day and described last week in this article.

On December 6th attorneys for plaintiffs in a consolidated class action against banks of the London Gold Fix and UBS, asked the court for leave to amend with a Third Amended Complaint. The TAC includes additional facts based on a “limited set of cooperation materials” produced by former defendant Deutsche Bank, as part of a settlement agreement and further statistical analysis.

Supporting documents say the amended complaint addresses the Court’s October finding that the previous complaint failed to plausibly plead firstly that UBS was part of the antitrust conspiracy, and secondly that the conspiracy existed prior to 2006.

Also, for the first time a gold producer has been added to the class action of those claiming losses in gold trading due to the manipulation. Compania Minera Dayton, SCM the Chilean subsidiary of Australian resources company Lachlan Star is said to have “sold gold on many of the specific days on which Plaintiffs demonstrated manipulation of gold investments” totaling $287.4 million over the period 2004 to 2013.

In support of allegations that UBS shared customer order information and executed coordinated trades to manipulate gold markets, samples of “dozens” of chat room messages between UBS and Deutsche Bank are contained in the revised document indicating "many efforts to artificially suppress gold prices, and to manipulate gold prices at the time of the Fixing.”

Filings include the following script reminiscent of an 1980’s arcade game scene. Rather than competing for business in the marketplace, supposed competitors UBS and Deutsche Bank however are seen coordinating tactics as they anticipate the most illiquid of days to jointly execute their sell orders for greatest negative impact on the market.

Deutsche Bank: bro japan holiday today


Deutsche Bank: think it’ll be quiet


Deutsche Bank: well, illiquid, not quiet haha


Deutsche Bank: illiquid means wild wild west


UBS:okay when gold pops 1430


UBS: we whack it


UBS: u sell your 50k


UBS: i sell my 20k


UBS: then we double that up and produce our on liquidity too


UBS: that should be enough to cap it on a holiday


Deutsche Bank: haha yeah


Deutsche Bank: lol

One chat see's a Deutsche Bank trader confirming with a UBS trader his trading had indeed influenced the Gold Fix: “u just said u sold on fix.”  The UBS traded replied “yeah,” “we smashed it good.”

The secret associations between traders appear to be close knit, with the members willing to assist their opposite numbers at every chance: UBS “im feeling helpful to ubs today.”  The UBS trader then said “need to push this back wer,” to which the Deutsche Bank trader replied “ok,” and “lets do it.”

Counter-intuitively, the banks special penchant to suppress the price of gold is repeated throughout the examples. As the gold ticker rose on this occasion the indignant traders teamed up to push it back down, commending themselves sarcastically meanwhile.

Deutsche Bank: someone still trying to push our gold up


UBS: so u should pay the mkt right away


Deutsche Bank: nope


UBS: cause chances are someone else got hit and u f*ck them up


Deutsche Bank: no touchy


Deutsche Bank: im short 15k


Deutsche Bank: xau


Deutsche Bank: too much fire


UBS: im gonna sell more silver and gold


Deutsche Bank: k


Deutsche Bank: i really think we are on the right side today, being short

Not only are they pushing the market down but also there appears to be intent to harm client interests as the November 2014 FINMA investigation loosely reported.

Here a UBS trader gives information to a Deutsche Bank trader about a client’s order query on Nov 16th 2010, and strategizes to punish them by whacking the price lower if purchased from another party.

UBS: boc sniffing around in gold


Deutsche Bank: likewise


Deutsche Bank: passed my bid


Deutsche Bank: dude


Deutsche Bank: so their round


Deutsche Bank: is from u


Deutsche Bank: to me


Deutsche Bank: haha


UBS: not always


UBS: anyway good to give each other heads up


UBS: if we find out side, whack it


Deutsche Bank: yeah


So much about not rigged market
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