Category: Layering


DOJ and CFTC Bring Actions Against Precious Metals Traders

Posted on September 20th, by and in CFTC, Criminal Liability, DOJ, Layering, Parallel Investigations, Spoofing. Comments Off on DOJ and CFTC Bring Actions Against Precious Metals Traders

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 »


Co-Owner of an Unregistered New Jersey Brokerage Firm Settles “Spoofing” Charges

Posted on April 10th, by and in Layering, Manipulation, Spoofing. Comments Off on Co-Owner of an Unregistered New Jersey Brokerage Firm Settles “Spoofing” Charges

The SEC filed a settled administrative proceeding against an owner of a New Jersey based brokerage firm for engaging in an illegal “layering” or “spoofing” scheme that resulted in unlawful profits of almost $1 million. See SEC press release.

Market manipulation always has been a high priority for the SEC’s Enforcement Division and encompasses a broad range of activities that distort the natural forces of supply and demand. “Layering” or “spoofing” manipulation schemes involve placing a series of non-bona fide orders and then immediately canceling the orders before they are executed. These schemes create the illusion of demand resulting in an artificial increase in the market price of a security. The activity generally spurs the interest of other investors who place orders—thinking that the stock is “hot” and the increased activity is legitimate. After the manipulator stops entering orders, the price … Read More »




From the Blog:

The SEC in 2019: Doing More With Less

Facing a 35-day government shutdown and new restrictions on the ability to recover disgorgement, it would be perfectly understandable if the SEC’s Division of...

DOJ Drops Insider Trading Charges After Guilty Plea Found Insufficient

Last week, the Southern District of New York dropped its prosecution of Richard Lee, a former portfolio manager at SAC Capital who, in 2013,...

The SEC’s SCSD Initiative Second Wave and the Applicability of the President’s Recent Executive Order

On September 30, 2019, the SEC ordered an additional 16 self-reporting investment advisory firms to pay nearly $10 million in disgorgement. Some have referred...