Eric Moncada, a CFTC-registered floor broker, is facing charges of attempted market manipulation, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the Southern District of New York on December 4, 2012. Moncada, along with companies BES Capital LLC and Serdika LLC, are accused of manipulating the price of the December 2009 #2 Soft Red Winter Wheat futures contract traded on the Chicago Board of Trade (CBOT).
The CFTC alleges that Moncada, acting as an employee or agent of both BES and Serdika in October 2009, engaged in a scheme to create a misleading impression of market activity. He reportedly entered and immediately cancelled numerous large-lot wheat futures orders that he had no intention of fulfilling. These orders were designed to appear as legitimate interest, potentially influencing the price of the contract.
According to the complaint, Moncada would strategically place these large orders at prices near the best bid or offer to avoid execution, hoping to capitalize on any resulting price movements by then placing smaller, executable orders on the opposite side of the market. This tactic was allegedly used repeatedly in an attempt to drive the price of the December 2009 Wheat Futures Contract both higher and lower.
The CFTC also alleges that Moncada engaged in fictitious sales and non-competitive transactions, entering equal and opposite buy and sell orders to transfer positions between BES and Serdika accounts without intending to establish a genuine market position.
David Meister, Director of the CFTC’s Division of Enforcement, emphasized the seriousness of the alleged conduct, stating that such deceptive trading schemes undermine market integrity. “Traders may not employ deceptive trading schemes simply to drive price,” Meister said. “As our action today should make clear, we police the market for this type of activity and will bring charges against those who attempt to illegally game prices for their own advantage.”
The CFTC is seeking civil monetary penalties, trading and registration bans, and permanent injunctions against Moncada, BES Capital LLC, and Serdika LLC to prevent further violations of federal commodities laws. The agency expressed gratitude for the assistance provided by the CME Group, Inc., the parent company of the CBOT.
Source: CFTC.gov
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