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ARTICLE · 05 OCTOBER 2020

Private Fund Settles CFTC Spoofing Charge

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A private fund and its former trader settled CFTC charges for multiple instances of spoofing in futures markets.

United StatesFinance and Banking
Hogan Lovells Cadwalader
Hogan Lovells Cadwalader
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A private fund and its former trader settled CFTC charges for multiple instances of spoofing in futures markets.

The CFTC found that the firm's former trader entered bids or offers on one side of the market for various futures contracts (e.g., soybean, gold and crude oil futures), and entered a number of similar bids and offers on the other side of the market with the intent to cancel those bids and offers before they could be executed. The CFTC determined that, as a result of the trader's conduct, both the firm and the trader violated Section 4c(a)(5)(C) ("Prohibited Transactions") of the CEA.

To settle the charges, the firm and trader agreed to (i) cease and desist from further violations of the relevant rules and (ii) pay a monetary penalty of $585,000 in total ($135,000 for the former trader and $450,000 for the firm). Additionally, the trader agreed to suspend trading activity for three months.

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