A Swiss trader is facing charges of market manipulation and spoofing following a civil enforcement action filed by the U.S. Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the District of Connecticut. Andre Flotron, formerly a precious metals trader at Bank A, is accused of engaging in a five-year scheme to illegally influence precious metals futures prices.
According to the CFTC complaint, from approximately August 2008 through November 2013, Flotron routinely placed large buy or sell orders with the intention of canceling them before execution – a practice known as “spoofing.” These “spoof orders” were strategically positioned opposite smaller orders Flotron actually intended to execute, designed to create a false impression of market demand or supply.
The CFTC alleges Flotron aimed to trick other market participants into trading at artificially distorted prices, benefiting his smaller, legitimate orders. The complaint further asserts that Flotron not only engaged in this practice himself but also actively trained another trader at Bank A in the technique of spoofing around 2008.
“Spoofers unlawfully inject false information into the market that is intended to trick law-abiding market participants into trading at distorted prices that improperly benefit the spoofer,” stated James McDonald, CFTC’s Director of Enforcement. “As this case shows, the CFTC is committed to pursuing the individuals responsible for spoofing in our markets.”
The CFTC is seeking civil monetary penalties, disgorgement of any ill-gotten gains, and a permanent injunction barring Flotron from future violations of the Commodity Exchange Act and CFTC Regulations. The investigation received assistance from the U.S. Department of Justice, the Federal Bureau of Investigation, and the CME Group. The case is being prosecuted by the CFTC’s Spoofing Task Force.
Source: CFTC.gov
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