A US federal court in Connecticut affirmed Andre Flotron’s 2018 agreement to pay a fine of US $100,000 and submit to a one-year trading and registration ban to settle civil charges brought by the Commodity Futures Trading Commission that he engaged in spoofing-type trading activity from at least August 2008 through at least November 2013 involving precious metals futures contracts traded on the Commodity Exchange, Inc. In 2017, Mr. Flotron – a former metals trader with UBS – was indicted for conspiracy to defraud in connection with the same essential conduct. He was found not guilty of this charge by a jury in a federal court in Connecticut in April 2018. (Click here for details 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.)
Separately, last week, the US Chamber of Commerce, the Bank Policy Institute and the Securities Industry and Financial Markets Association filed a friend of the court brief in connection with the criminal case against James Vorley and Cedric Chanu brought in summer 2018 related to the defendants’ purported spoofing trading activities. The organizations claimed that charges against the defendants for wire fraud (and not spoofing) raised issues of concern to the business community, because they implied that orders entered without an intent of execution for any reason constituted fraudulent statements to the marketplace. According to the organizations, “[o]rders subject to execution and market risk cannot constitute false statements.” (Click here to access a copy of the relevant amicus brief.) Mr. Vorley and Mr. Chanu were named in criminal complaints filed in a US federal court in Chicago related to alleged spoofing trading activities on the Commodity Exchange, Inc. from at least December 2009 through November 2011. (Click here for details in the article “Alleged Spoofer Exonerated in Criminal Trial Agrees in Principle to CFTC Settlement; Two More Purported Spoofers Criminally Charged” in the August 5, 2018 edition of Bridging the Week.) FIA has also been granted permission to file an amicus brief in this matter, apparently intending to express views similar to the three organizations (click here for background).