The CFTC and DOJ entered charges against a group of former commodities traders in connection with an alleged $60 million spoofing conspiracy.
The CFTC Order settling the enforcement action against Kamaldeep Gandhi alleges that the traders would place spoofing orders on one side of the market in order to induce market participants to trade against an "iceberg order" on the other side of the market. The CFTC describes an "iceberg" order as one in which only a small part of the volume of the order is shown and the larger part is concealed from other market participants. The CFTC separately filed a civil complaint against Krishna Mohan in the U.S. District Court for the Southern District of Texas.
According to the DOJ indictment of Yuchun Mao, the traders placed large quantities of "spoofed" trading orders on the Chicago Mercantile Exchange, the Chicago Board of Trade and the New York Mercantile Exchange that the traders never intended to execute, thus deceiving other market participants. The DOJ also filed criminal charges against Mr. Gandhi and Mr. Mohan, each of whom pleaded guilty and agreed to permanent trading bans.
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