Chicago, IL – The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against David Skudder, Global Ag LLC, and Nesvick Trading Group LLC, alleging a years-long scheme to manipulate soybean futures and options markets. The complaint, filed in the U.S. District Court for the Northern District of Illinois, centers on accusations of “spoofing” – placing orders with the intent to cancel them before execution – and other manipulative practices.
From approximately September 2014 through March 2019, Skudder, a founder, principal, and registered associated person of Global Ag LLC, allegedly engaged in a sophisticated spoofing operation. He is also a registered associated person of Nesvick Trading Group LLC. According to the CFTC, Skudder placed hundreds of large soybean futures orders he never intended to fill, simultaneously placing genuine orders designed to benefit from the artificial price movements created by the spoof orders.
The alleged scheme involved both direct manipulation within the soybean futures market and “cross-market spoofing,” where spoof orders in one market were used to influence prices in the correlated options on soybean futures market. The CFTC claims Skudder deceived other traders about actual supply and demand, creating a false impression of market direction. This, in turn, allowed him to execute his genuine orders at more favorable prices and in larger quantities.
The CFTC is seeking a range of penalties, including monetary fines, restitution for harmed parties, disgorgement of ill-gotten gains, and permanent bans on Skudder, Global Ag LLC, and Nesvick Trading Group LLC from registering with the CFTC or trading in commodity markets. The agency also requests a permanent injunction to prevent further violations of the Commodity Exchange Act (CEA) and related regulations.
“Through this action, the CFTC shows it continues to vigorously detect and prosecute spoofing and manipulation, including when actors attempt to obscure their misconduct by using different markets or financial products,” said CFTC Acting Director of Enforcement Vincent McGonagle. The case is being pursued by the CFTC’s Spoofing Task Force.
Individuals with information regarding potential violations of commodity trading laws are encouraged to report it to the CFTC via its toll-free hotline (866-FON-CFTC), online tip form, or the Whistleblower Office, which offers potential financial rewards for information leading to successful enforcement actions.
Source: CFTC.gov
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