CFTC Orders Panther Energy Trading LLC and Principal Michael J. Coscia to Pay Fines and Bans Them from Trading (with Lofchie Comment)

The CFTC issued an order requiring Panther Energy Trading LLC and Michael Coscia to pay $2.8 million and imposed a one-year trading ban for utilizing a computer algorithm to engage in the illegal practice of "spoofing." Using the "spoofing" algorithm, Coscia and Panther unlawfully tricked other algorithmic trading systems to hit off-market orders that Panther had placed, resulting in Panther profiting by virtue of the off-market execution. Coscia is subject to a one-year trading ban plus damages that include a civil monetary penalty and disgorging for trading profits.CFTC Commissioner Bart Chilton released a concurring statement regarding Panther Energy Trading and Michael J. Coscia. His statement asserted that, while he agrees with the penalties generally, he is dissatisfied with the imposition of a mere one-year trading ban, which he feels should be harsher.

Lofchie Comment: Dealbreaker ran a nice article explaining the violation. See also our prior article on the topic of spoofing and disruptive trading practices: Commissioner O'Malia Issues Further Guidance on Disruptive Trading Practices (with Lofchie Comment).

See: CFTC Press Release.See also: CFTC Commissioner Chilton's Concurring Statement in the Matter of Panther Energy Trading and Michael J. Coscia (July 22, 2013)..See also:CFTC Commissioner Chilton's Keynote Address on "Market Cheetahs" (June 24, 2013).