Washington, D.C. – UK-based trader Adam Cobb-Webb has been penalized by the Commodity Futures Trading Commission (CFTC) for engaging in a pattern of spoofing involving West Texas Intermediate (WTI) light sweet crude oil futures contracts. The illegal activity occurred on the New York Mercantile Exchange, Inc. (NYMEX) between approximately December 16, 2021, and January 14, 2022.
The CFTC order requires Cobb-Webb to pay a $150,000 civil monetary penalty. He is also 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. Additionally, the order mandates Cobb-Webb cease and desist from violating the spoofing prohibition outlined in the Commodity Exchange Act (CEA).
According to the CFTC, Cobb-Webb utilized a specific spoofing technique. He placed large “iceberg” orders – partially visible in the order book – intending to execute them, while simultaneously layering smaller, fully-displayed orders on the opposite side of the book at key price levels. These smaller orders were deliberately designed to be cancelled before execution. This pattern was repeated daily during the period in question.
The investigation revealed that Cobb-Webb’s spoof orders frequently comprised a significant portion of the visible orders at the top price levels. The volume of these spoof orders often exceeded the visible quantity of his legitimate iceberg orders. The CFTC determined Cobb-Webb intended to create a false impression of market interest, encouraging other traders to cross the bid-ask spread and fill his actual orders. Investigators found that Cobb-Webb either knew or recklessly disregarded that his actions would create misleading appearances of market depth and distort supply and demand information.
“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 the investigation. The case was led by Ashley J. Burden, Matthew Edelstein, Elizabeth N. Pendleton, Scott R. Williamson, and Robert T. Howell of the Division of Enforcement.
The CFTC encourages the public to report suspicious activity or potential violations of commodity trading laws through its toll-free hotline (866-FON-CFTC), online tip/complaint form, or by contacting the Whistleblower Office. Whistleblowers may be eligible for financial rewards of up to 30% of collected monetary sanctions.
Source: CFTC.gov
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