Ex-Scotia Capital, Bear Stearns precious metals trader pleads guilty, will cooperate with feds in ‘spoofing’ probe

via CNBC:

  • A former Scotia Capital and Bear Stearns trader pleaded guilty and admitted manipulating precious metals futures markets for nine years, the latest in a series of crackdowns on so-called spoofing trades.
  • The trader, Corey Flaum, is cooperating with an ongoing federal criminal investigations into gold, silver, platinum and palladium markets, as is ex-J.P. Morgan trader John Edmonds.
  • Federal prosecutors have lodged 11 spoofing cases against 15 defendants in the past five years.

 

A former trader at Scotia Capital and Bear Stearns pleaded guilty Thursday to a federal crime and admitted manipulating precious metals markets for nine years — the latest in a series of crackdowns in the commodities markets by the Justice Department.

The trader, Corey Flaum, 41, of Mount Kisco, New York, is cooperating with an ongoing federal criminal investigation, officials said as they announced his guilty plea to one count of attempted commodities price manipulation in U.S. District Court in Brooklyn.

Flaum during his guilty plea admitted that from approximately June 2007 and July 2016 he “placed thousands of orders to manipulate the prices of gold, silver, platinum and palladium futures contracts,” according to the Justice Department.

Flaum worked at Scotia Capital from 2010 to 2016, and the defunct investment bank Bear Stearns from 2006 to 2008, according to FINRA’s BrokerCheck system. He is scheduled to be sentenced Oct. 29.

Scotia Capital declined to comment when contacted by CNBC. Flaum did not immediately respond to a request for comment.