Chicago, IL – The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against James Vorley, a United Kingdom resident, and Cedric Chanu, a United Arab Emirates resident, alleging they engaged in a manipulative spoofing scheme in the precious metals futures markets. The complaint, filed in the U.S. District Court for the Northern District of Illinois, details a scheme spanning from May 2008 to at least July 2013.
According to the CFTC, Vorley and Chanu, while employed at a large financial institution, repeatedly placed orders with the intent to cancel them before execution – a practice known as spoofing. They allegedly layered these “spoof orders” alongside genuine orders for COMEX gold, silver, platinum, and palladium futures contracts. This was done to create a false impression of market demand or supply, tricking other traders into executing against the legitimate orders at favorable prices.
The CFTC alleges the defendants intentionally or recklessly sent these false signals to manipulate the market. Furthermore, Vorley and Chanu are accused of coordinating their spoofing activities with other traders and even instructing a colleague on how to implement the deceptive practice.
James McDonald, CFTC’s Director of Enforcement, emphasized the agency’s commitment to prosecuting spoofing, stating it “undermines the integrity of our markets.” He noted the CFTC will pursue both companies and individuals involved in such misconduct.
The CFTC is seeking civil monetary penalties, disgorgement of ill-gotten gains, and a permanent injunction barring Vorley and Chanu from future violations of the Commodity Exchange Act and CFTC Regulations. The agency received assistance in its investigation from the U.S. Department of Justice, the Federal Bureau of Investigation, the CME Group, and the UK Financial Conduct Authority.
The case is being handled by the CFTC’s Spoofing Task Force, with staff members Katie Rasor, Brandon Wozniak, Alben Weinstein, Patryk J. Chudy, Lenel Hickson, Jr., and Manal M. Sultan leading the investigation.
Source: CFTC.gov
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