Washington, D.C. – Adam Cobb-Webb, a UK-based trader, has been penalized by the Commodity Futures Trading Commission (CFTC) for engaging in a pattern of spoofing in West Texas Intermediate (WTI) light sweet crude oil futures contracts. The charges stem from trading activity on the New York Mercantile Exchange, Inc. (NYMEX) between approximately December 16, 2021, and January 14, 2022.
The CFTC order, issued on August 1, 2023, requires Cobb-Webb to pay a $150,000 civil monetary penalty. Additionally, he is banned for one year from trading on any CFTC-designated exchange or with any CFTC-registered entity, effectively barring him from all commodity interest trading. He is also ordered to cease and desist from violating the spoofing prohibition outlined in the Commodity Exchange Act (CEA).
According to the CFTC, Cobb-Webb employed a specific spoofing technique. He would place large “iceberg” orders – partially visible in the order book – intending to execute them, while simultaneously placing fully-displayed orders on the opposite side of the book at key price levels. These fully-displayed orders were then cancelled before execution. This pattern occurred daily throughout the relevant period.
Investigators found that Cobb-Webb’s spoof orders often represented a significant portion of the orders at the top price levels. The volume of these spoof orders frequently exceeded the visible quantity of his legitimate iceberg orders. The intent, the CFTC alleges, was to create a false impression of market interest, inducing other traders to cross the bid-ask spread and fill his actual orders. Cobb-Webb either knew, or recklessly disregarded the fact, that these actions created misleading appearances of market depth and influenced supply and demand, ultimately impacting market activity.
“This order is the latest in a long series of actions by the Commission to punish spoofing in the markets the Commission oversees,” stated Ian McGinley, Director of Enforcement. “Spoofing is easier than ever for the Commission to identify and pursue. Our message to would-be spoofers is this: Don’t.”
The CFTC acknowledged the assistance of the CME Group in this investigation. The case was led by Ashley J. Burden, Matthew Edelstein, Elizabeth N. Pendleton, Scott R. Williamson, and Robert T. Howell from the Division of Enforcement.
Source: CFTC.gov
Related Federal Cases
- Commodity Futures Trading Commission, Investor Fraud, District of Columbia 2024 · District of Columbia
- Starberry Limited, Unregistered Forex Trading Firm, District of Columbia 2022 · District of Columbia
- Patrick Brunner, Commodities Fraud, District of Columbia 2018 · District of Columbia
- Brian Hinman, Aiding and Abetting Fraud, District of Columbia 2016 · District of Columbia
- Michel Geurkink, Forex Fraud, District of Columbia 2015 · District of Columbia
