Jitesh Thakkar was acquitted of the criminal charge of conspiracy to commit spoofing during his criminal trial last week related to his role in the spoofing activities of Navinder Sarao, who pleaded guilty to criminal charges in November 2018. Two pending counts of aiding and abetting spoofing against Mr. Thakkar are scheduled to be considered by a jury this week, after the presiding judge, the Hon. Robert Gettleman of the US District Court for the Northern District of Illinois, referred to the government’s overall action as resting on a “thin case,” according to numerous reports. (Click here for a sample report by the Chicago Tribune.)
Mr. Thakkar was named in a criminal action by the Department of Justice and a civil action by the Commodity Futures Trading Commission for purportedly developing “back-of-the-book” software that was used by Mr. Sarao to effectuate his spoofing activities. In court papers, Mr. Thakkar has claimed that he never was told by Mr. Sarao the purpose of his software request, but in any case, he did not develop the actual software; he assigned the task to other programmers at his company – Edge Financial Technologies, Inc.
Two weeks ago, Mr. Thakkar prevailed in a motion to preclude the government from instructing the jury they could convict the defendant if they found he had a strong suspicion that the relevant software would be used for spoofing, but he purposely avoided confirming that fact. Instead, the government will have to show Mr. Thakkar possessed knowledge of Mr. Sarao’s illicit purpose beyond a reasonable doubt. (Click here for background on the charges against Mr. Thakkar and Mr. Sarao in the article “Criminal Trial of Purported Programmer for Convicted Spoofer Begins This Week; Proposed Ostrich Instruction to Jury Rejected by Court” in the March 31, 2019 edition of Bridging the Week.)
My View: After the court’s dismissal of the conspiracy count against Mr. Thakkar, it seems less likely that the jury evaluating Mr. Thakkar’s remaining aiding and abetting charges will find beyond a reasonable doubt that Mr. Thakkar knew of the purpose of the software requested by Mr. Sarao used to effectuate his spoofing activities. Coming on the heels of the acquittal of Andre Flotron, the former UBS trader, who last April 2018 was found not guilty by a jury for conspiracy to defraud in connection with purported spoofing‑type trading activity involving precious metals futures contracts listed on the Commodity Exchange, Inc., a total defeat by the Department of Justice against Mr. Thakkar would elevate questions regarding the type and quality of evidence required by the DoJ to gain a successful spoofing conviction. We should know a lot more by next week. (Click here for background regarding Mr. Flotron’s acquittal in the article “Former UBS Trader Found Not Guilty of Conspiracy to Defraud for Alleged Spoofing” in the April 29, 2018 edition of Bridging the Week.)