(Adds CME comment)
April 30 (Reuters) - CME Group Inc on Thursday suspended two traders from its markets for allegedly colluding to enter orders repeatedly with no intention of trading, a strategy that has been fingered as a key contributor to the 2010 Wall Street flash crash.
Heet Khara and Nasim Salim, both traders of CME Group's gold and silver futures contracts on its Comex exchange in New York, are prohibited from trading for 60 days, according to a disciplinary notice released by the futures exchange.
Each trader, the notice said, "entered orders or layered multiple orders to encourage market participants to trade opposite his smaller orders resting on the opposite side of the book ... after receiving a fill on his smaller orders, (each trader) would then cancel the resting order or layered multiple orders that he had entered on the opposite side of the order book."
Reuters was not able to immediately contact either trader to comment on the CME notice.
CME monitors its markets for patterns of disruptive trading activity and prosecutes violations it identities, a company spokeswoman said. She declined to comment specifically on the case involving Khara and Salim.
The CME's action is notable for its swiftness. The activity at issue began in February and last took place on Tuesday, CME Group said. Most CME disciplinary actions are carried out after years of investigations.
It is also noteworthy for its timing. Last week, CME trader Navinder Sarao was jailed in the United Kingdom after the U.S. Justice Department accused him of manipulating markets using spoofing tactics similar to those described in the CME notice.
The CME alleged in the notice that Khara and Salim knew each other and "on multiple occasions coordinated efforts to engage in disruptive activity."
"In an example from April 28, 2015, Salim entered small-lot orders on one side of the market in gold futures, after which Khara entered large orders on the opposite side. When Salim's small orders were filled, Khara canceled the large orders," according to the notice.
Neither CME executives nor analysts covering the company mentioned spoofing or Sarao, the U.K. trader charged in the flash crash, on CME's first-quarter earnings call on Thursday.
The exchange operator has previously said the futures market did not cause the flash crash. (Reporting by Ann Saphir in San Francisco and Tom Polansek in Chicago; Editing by Alan Crosby and Lisa Shumaker)