ICE Futures U.S. filed and settled charges against Cashcot Industries Pte. Ltd. and 1 Jain, a trader employed by Cashcot, for engaging in layering and spoofing-type conduct in the Cotton No. 2 futures market on January 23, 2014. According to IFUS, on that day, Mr. Jain entered multiple 500-lot March 2014 cotton futures orders on one side of the market at the same time he entered small lot orders on the other side of the market. He did this, claimed IFUS, to create the appearance of market pressure and to “mislead market participants into trading opposite the small orders.” Mr. Jain cancelled or amended the large orders after his small orders were executed. In addition, charged IFUS, on July 28, 2014, Mr. Jain entered an order in March 2015 cotton futures to offset an opposite order by a counterparty who he knew, through pre-execution communications, would be hedging a swap position by also placing an order in the same cotton futures. To resolve this matter, Cashcot agreed to pay a fine of US $80,000 and Cashcot and Mr. Jain agreed to a six-month denial of all IFUS trading privileges.
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