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Manipulating the S&P part II

Posted by archive 
june 2004
By anonymous
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Complete story
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... trade at certain price levels and then gets the support he needs.

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. trade at certain price levels and then gets the support he needs.

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. trade at certain price levels and then gets the support he needs.

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. trade at certain price levels and then gets the support he needs.

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. trade at certain price levels and then gets the support he needs.

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. trade at certain price levels and then gets the support he needs.

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. trade at certain price levels and then gets the support he needs.

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. trade at certain price levels and then gets the support he needs.

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. trade at certain price levels and then gets the support he needs.

Please let me know what you think.