Chicago trader Eric Schwartz has been penalized by the Commodity Futures Trading Commission (CFTC) for engaging in a pattern of spoofing, a form of market manipulation. The CFTC issued an order simultaneously filing and settling charges against Schwartz on August 24, 2022.
The investigation revealed that Schwartz engaged in spoofing activities involving Natural Gas (NG) and Reformulated Blendstock for Oxygenate Blending Gasoline (RBOB) futures contracts traded on the Chicago Mercantile Exchange (CME) between April and July of 2020. Spoofing, as defined by the Commodity Exchange Act (CEA), involves placing bids or offers with the intention of canceling them before they are executed, creating a false impression of market demand or supply.
The CFTC order mandates that Schwartz pay a $100,000 civil monetary penalty. In addition to the fine, Schwartz is suspended from trading on any CFTC-designated exchange, as well as with all other CFTC-registered entities, and in all commodity interests for a period of four months. The order also requires Schwartz to cease and desist from any further violations of the CEA’s spoofing prohibition.
This enforcement action was conducted in coordination with a parallel investigation by the CME Group, which had previously announced its own disciplinary measures against Schwartz. The CFTC took the CME Group’s penalties into account when determining the appropriate civil monetary penalty.
The CFTC acknowledged the assistance of the CME Group in the matter. The case was led by CFTC staff members Amanda Burks, Elizabeth May, Aimée Latimer-Zayets, Erica Bodin, and Rick Glaser.
Source: CFTC.gov
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