The U.S. District Court for the District of Connecticut ordered a former precious metals trader (the "trader") to pay a $100,000 civil monetary penalty for spoofing and partaking in a deceptive scheme.
The CFTC Order arose from a CFTC complaint charging that the trader placed orders in the precious metals futures market with the intention of canceling the orders prior to execution (i.e., spoof orders). According to the CFTC, the trader intended for his spoof orders "to induce other market participants to transact on smaller, 'Genuine Orders' that [he] placed on the opposite side of the market." The trader scheme, according to the Order, was to send false signals of supply to the market "to create the misimpression that the price would likely decline and lead market participants into transacting on his Genuine Orders to buy." The CFTC determined that the trader's misconduct violated the CEA and CFTC rules.
The CFTC Order also imposed a one-year trading and registration ban against the trader.