Washington, D.C. – Brendan Delovitch, a Canadian trader, has been penalized by the Commodity Futures Trading Commission (CFTC) for engaging in spoofing – a manipulative trading practice involving the placement of orders with the intent to cancel them before execution – across multiple exchanges. The CFTC issued charges against Delovitch, along with Wesley Johnson of Canada, Rajeev Kansal of India, and ARB Trading Group LP, a Chicago-based proprietary trading firm, on September 30, 2020.
The investigation revealed that the respondents engaged in spoofing of agricultural and metals futures contracts on the Chicago Mercantile Exchange (CME), Commodity Exchange (COMEX), Chicago Board of Trade (CBOT), and ICE Futures US (ICE) between May 2017 and June 2020. Specifically, Delovitch was found to have spoofed CBOT soybean futures, CME live cattle futures, COMEX copper futures, and COMEX silver futures from May 2017 to December 2017.
As a result of the CFTC action, Delovitch is required to pay a $100,000 civil monetary penalty and is suspended for four months from trading on any CFTC-designated exchange or registered entity. He is also ordered to cease and desist from violating the Commodity Exchange Act’s spoofing prohibition. ARB Trading Group LP was assessed a $445,000 civil monetary penalty, being held vicariously liable for the actions of Delovitch and other traders employed by its subsidiaries.
The CFTC collaborated with CME Group and ICE in this enforcement action, marking the first parallel case involving both exchanges. CME Group and ICE also announced separate disciplinary actions against Delovitch, Johnson, Kansal, and subsidiaries of ARB Trading. The CFTC considered these parallel fines when determining its own penalties.
“This enforcement action demonstrates the CFTC’s commitment to working closely with our regulatory partners to hold wrongdoers accountable,” stated James McDonald, Director of the Division of Enforcement. “We will continue to take aggressive action against spoofing in all of its forms and to hold accountable both individual traders and the firms that employ them.”
The case highlights the CFTC’s ongoing efforts to combat manipulative trading practices and maintain the integrity of commodity markets.
Source: CFTC.gov
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