CFTC Slaps $100K Fine on EX-UBS Trader Accused of Spoofing

The Commodity Futures Trading Commission (CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term) on Thursday announced that it received a Connecticut federal judge’s blessing to fine former UBS commodities trader Andre Flotron $100,000 for manipulating the precious metals futures market through a trading tactic known as ‘spoofing.’

Flotron was arrested in 2017 while visiting his girlfriend in New Jersey in the latest case of spoofing on the CME Group’s commodities Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term.

The complaint, filed last year in federal court in Connecticut, alleges that Flotron and unidentified co-conspirators devised and executed schemes to defraud other market participants through the illegal practice.

James McDonald, CFTC Director of Enforcement, commented: “This case reflects our continued commitment to preserving the integrity of our markets — like the precious metals markets at issue here — and to rooting out unlawful practices like spoofing. As this case shows, we will continue to work vigorously to hold individuals accountable, and not just the companies that employ them, for misconduct in our markets.”

Regulators stepped up their policing of spoofing

Flotron, 56, worked at the giant Swiss bank in Switzerland and Stamford. The case accused him of manipulating precious metal prices by using fake orders to make it look as if there was genuine activity.

The complaint filing contained detailed allegations of spoof trades, in which Flotron and unidentified co-conspirators made large orders for precious metals transactions that they had no intention of completing.

By placing large buy and sell orders that they never intended to fill, they sent a phony signal that tricked competitors and moved the market, allowing Flotron to quickly cancel those orders and make real trades in the opposite direction, the complaint alleges.

UBS, which wasn’t charged in the spoofing case and whose shares were little changed today, has reached multiple settlements with US regulators in recent years on issues including metals prices rigging.

Working with the CFTC, prosecutors in the US have been developing spoofing cases across markets since the 2010 adoption of the Dodd-Frank financial law, which made the practice illegal.