A former trader agreed to settle CFTC charges for engaging in "spoofing" (i.e., "bidding or offering with the intent to cancel the bid or offer prior to execution) and manipulative schemes.
According to the Order, Krishna Mohan, while an employee at a proprietary trading firm, acted with others to "trick market participants into executing against the orders he wanted filled" at better prices, or in larger quantities, than he otherwise would have obtained.
Mr. Mohan entered into a "formal cooperation agreement" with the agency's Division of Enforcement. The CFTC (i) ordered Mr. Mohan to cease and desist from violating the Commodity Exchange Act's ban on spoofing and the use of manipulative schemes, and (ii) banned him for three years from trading and other activities in any CFTC-regulated market. The CFTC said that it reserved a determination of monetary sanctions against Mohan based on his future cooperation.
Mr. Mohan pleaded guilty in the U.S. District Court for the Southern District of Texas to conspiracy to commit wire fraud, spoofing and commodities fraud in connection with similar conduct to that in the CFTC action. Mr. Mohan is awaiting sentencing in the criminal case.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.