Recently, the Department of Justice indicted three precious metals traders in the Northern District of Illinois, charging each them with violating the Racketeer Influenced and Corrupt Organization Act (“RICO”), committing wire and bank fraud, and conspiring to commit price manipulation, bank fraud, wire fraud, commodities fraud, and “spoofing.” Two of those traders were also charged with committing commodities fraud, spoofing, and attempted price manipulation and were named as defendants in a civil suit brought by the CFTC in the same court, alleging violations of the Commodity Exchange Act and CFTC Regulations.
Both the indictment and the civil complaint contend that over the course of approximately seven years, the defendants intentionally manipulated the price of precious metals futures contracts by “spoofing,” or “placing orders to buy or sell futures contracts with the intent to cancel those orders before execution.” Specifically, both the … Read More »
Last week, the Department
of Justice (“DOJ”) and the Securities & Exchange
Commission (“SEC”) announced charges connected to a large-scale,
international conspiracy to hack into the SEC’s Electronic Data Gathering,
Analysis and Retrieval (“EDGAR”) system and profit by trading on stolen
material, non-public information. The
conduct underlying these cases was one of the principal reasons that the SEC created
its Division of Enforcement “Cyber Unit” to target cyber-related
securities fraud violations.
In a 16-count indictment unsealed in
the United States District Court for the District of New Jersey, two Ukrainian
citizens, Artem Radchenko and Oleksander Ieremenko, were charged with
securities fraud conspiracy, wire fraud conspiracy, computer fraud conspiracy,
wire fraud, and computer fraud. The SEC’s complaint charged nine defendants – Ieremenko,
six traders in California, Ukraine, and Russian, and two entities – with antifraud
violations of the federal securities laws.
The charging documents allege that
Ieremenko and Radchenko hacked into the EDGAR system and stole thousands … Read More »
Deputy Attorney General Rod Rosenstein recently announced significant changes to the Department of Justice’s corporate enforcement policy regarding individual accountability, previously announced in the 2015 Yates Memo. The revised policy no longer requires companies who are the target of DOJ investigations to identify all parties involved in potential misconduct before they can be eligible to receive any cooperation credit. This alert examines the updated policy, which should provide companies with greater flexibility in conducting investigations and negotiating dispositions with DOJ in both criminal and civil cases.
Read the full alert.
Department of Justice Announces New Policy on Coordination of Enforcement Actions and Corporate Penalties
The Department of Justice has established a new policy that requires its attorneys to coordinate with one another and with other enforcement authorities when imposing multiple penalties for the same conduct. This policy is likely to protect companies from unfair outcomes resulting from a lack of coordination among the DOJ and other authorities.
I authored an alert that provides an overview of the new policy and discusses the potential impact on companies affected.
Click here to read the alert.
On April 25, 2018, a New Haven federal jury acquitted a former trader with a global bank accused of scheming to manipulate the precious metals futures markets with “spoofing,” a trading tactic that involves the use of allegedly deceptive bids or offers to feign the appearance of supply or demand. This appears to be one of the first setbacks for the Department of Justice (“DOJ”), U.S. Commodity Futures Trading Commission (“CFTC”), and futures self-regulatory organizations since they began aggressively investigating and civilly and criminally charging futures traders with spoofing several years ago. After successfully defeating Michael Coscia’s appeal to the U.S. Court of Appeals for the Seventh Circuit, this aggression accelerated with the CFTC’s and DOJ’s coordinated charges in January against several firms and traders. This verdict, however, may cause them to re-visit their aggression and certain strategies.
While it is … Read More »
Last week, the Commodity Futures Trading Commission (CFTC) and Department of Justice (DOJ) filed their most significant and aggressive actions against spoofers and the firms employing them for failing to supervise. The CFTC filed settled actions against each of the global firms for supervisory violations, amongst other charges, and the CFTC charged six individuals with alleged commodities fraud and spoofing schemes. In the parallel criminal actions, the DOJ announced criminal charges against eight individuals (the six charged by the CFTC plus two others). The CFTC’s and DOJ’s coordinated and complex investigative efforts and filings indicate increased aggressiveness by both in this area. Further, these efforts represent the greatest amount of cooperation ever between the CFTC and DOJ. As reported previously in this blog post, with the affirmation of the conviction of high-frequency trader Michael Coscia, we are likely witnessing a … Read More »