The two defendants in an enforcement action filed last year by the Commodity Futures Trading Commission alleging spoofing under a novel “flipping” theory, were advised last week that the CFTC may introduce certain recent trading activity which it claimed might be similar to trading it claimed was wrongful in its initial complaint. In October 2015, the CFTC filed civil charges in a federal court in Chicago against the two defendants—an individual and the trading firm for which he serves as founder, president and chief executive officer—claiming they engaged in trading on CME Group exchanges and the CBOE Futures Exchange that constituted spoofing and employment of a manipulative and deceptive device, scheme or artifice.  (Click here for additional background on the original CFTC complaint in the article, “CFTC Enforcement Action Introduces New Theory of Spoofing” in the October 25, 2015 edition of Bridging the Week.) According to the CFTC, it recently “became aware of market participant complaints” regarding defendants trading in a futures contract on the Chicago Mercantile Exchange during early February 2016. The CFTC said the CME represented to it “the activity appeared to reflect a flipping pattern” similar to trading activity described in its October 2015 complaint. The CFTC indicated that “if [it] can confirm that the complained of conduct . . . constitutes evidence of Defendants’ continued illegal pattern of trading” the CFTC will renew its request to expedite a hearing for a preliminary injunction against the defendants for their alleged wrongful conduct. Last week, Trillium Management LLC issued an analysis claiming that the new trading activity cited by the CFTC, "looks close enough to a trader legitimately changing his outlook and switching sides to not give rise an inference of manipulative intent" (click here to access Trillium's full analysis). According to a statement by an outside spokesman for the two defendants published in Bloomberg Business (click here to access the relevant article), “[i]t is unfortunate that the CFTC is relying on complaints made by certain of our firm’s competitors to attempt to expand the scope of an investigation that has been misguided from the outset.‎”