New York, NY – October 1, 2014 – Eric Moncada has been penalized $1.56 million and faces trading restrictions after being found to have attempted to manipulate the wheat futures markets, the U.S. Commodity Futures Trading Commission (CFTC) announced today.
The federal court Consent Order, issued against Moncada, stems from a complaint filed on December 4, 2012, in the U.S. District Court for the Southern District of New York. The CFTC alleged that Moncada, along with proprietary trading firms BES Capital LLC and Serdika LLC, engaged in manipulative practices regarding the Chicago Board of Trade (CBOT) #2 Soft Red Winter Wheat Futures Contract during eight days in October 2009.
According to the CFTC, Moncada’s scheme involved entering and immediately cancelling numerous large-lot wheat futures orders without intending to fulfill them. This activity was designed to create a false impression of increased market liquidity. Moncada then allegedly attempted to profit from any resulting price fluctuations by placing smaller orders, hoping to secure favorable prices.
“The Commission remains committed to protecting the integrity of the markets by prosecuting manipulative conduct of all forms,” stated CFTC Director of Enforcement Aitan Goelman. “This includes the type of conduct engaged in by Moncada – the wholesale entering and cancelling of orders without the intent to actually fill the orders.”
In addition to the $1.56 million civil monetary penalty, the court order prohibits Moncada from trading wheat futures products for five years. He is also barred from trading in any futures product and registering with the CFTC for one year.
The firms associated with Moncada, BES Capital LLC and Serdika LLC, already faced a default judgment in March 2014, which included penalties totaling $32.24 million and permanent trading and registration bans.
The case was led by CFTC staff members Andrew Ridenour, Jennifer Diamond, Jessica Harris, Erica Bodin, Elizabeth Davis, Rick Glaser, and Richard Wagner, with contributions from former staff Kenneth McCracken and Brian Walsh.
Source: CFTC.gov
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