The Commodity Futures Trading Commission entered into non-prosecution agreements with three individual traders formerly associated with a futures commission merchant that recently agreed to pay a fine of US $25 million to resolve charges that it engaged in spoofing activities from July 16, 2011, through December 31, 2012. The three traders were: Jeremy Lao, Daniel Liao and Shlomo Salant. In each non-prosecution agreement, the relevant trader admitted that he engaged in spoofing activity on behalf of the FCM. The CFTC said that it entered into such agreements with the three persons because of their “substantial cooperation” with the investigation of their former employer; their “immediate willingness” to accept responsibility for their misconduct; and the material assistance they provided to the CFTC’s Division of Enforcement, including implicating their prior employer. In a press release announcing this matter, recently appointed CFTC Director of Enforcement James McDonald noted that these were the first non-prosecution agreements entered into by the Commission and that he expected such agreements would be “an important part of the of the Division’s cooperation program going forward.” In March 2017, two other traders of the same FCM – Stephen Gola and Jonathan Brims – settled charges brought against them for spoofing activities by agreeing to pay fines of US $350,000 and US $250,000, respectively, and each consenting not to trade on any CFTC-regulated markets until six months after they fully paid their fines. (Click here for details of this settlement in the article “Former FCM Traders Settle CFTC Charges They Engaged in Spoofing More Than 1,000 Times” in the April 2, 2017 edition of Bridging the Week.)
Legal Weeds: David Liew, a former junior trader who many media sources have indicated was based in Singapore and associated with Deutsche Bank, recently settled charges brought by the CFTC that he engaged in spoofing, manipulation, and attempted manipulation of gold and silver futures on the Commodity Exchange, Inc. from December 2009 through February 2012. To resolve this action, Mr. Liew consented never to trade commodity interest contracts under the CFTC’s jurisdiction and never to associate with any CFTC registrant as a principal, officer or employee. However, as part of his settlement, Mr. Liew was not assessed a fine by the Commission. The CFTC said that Mr. Liew received “meaningful cooperation credit” because he entered into a formal cooperation agreement with it, provided it with substantial assistance to date, and promised to continue to cooperate with the Commission and other government agencies going forward. (Click here for details regarding Mr. Liew’s CFTC action and criminal prosecution in the article “Former Newbie Bank Trader Pleads Guilty to Criminal Charges and Settles CFTC Civil Charges for No Fine for Spoofing, Attempted Manipulation and Manipulation of Gold and Silver Futures” in the June 4, 2017 edition of Bridging the Week.) Both the CFTC’s non-prosecution agreements with the three traders and its settlement terms against Mr. Liew suggest that the CFTC’s Division of Enforcement is willing to minimize sanctions against some wrongdoers in return for their meaningful assistance in building enforcement actions against other alleged wrongdoers whose conduct the Division considers more problematic.