Chicago, IL – Former precious metals traders James Vorley and Cedric Chanu have been slapped with hefty penalties by the Commodity Futures Trading Commission (CFTC) for engaging in a manipulative trading scheme known as spoofing. Judge Steven C. Seeger of the U.S. District Court for the Northern District of Illinois issued final judgments against both men on April 7, 2022.
The CFTC alleged that between July 2011 and July 2013, while employed at Bank A, Vorley and Chanu routinely placed deceptive orders for COMEX gold, silver, platinum, and palladium futures contracts. They would submit genuine orders alongside “spoof” orders – orders they intended to cancel before execution – to create a false impression of market demand or supply.
According to the CFTC, this tactic was designed to manipulate prices and trick other market participants into executing trades on the traders’ smaller, legitimate orders. The agency determined that this behavior constituted both spoofing and a deceptive or manipulative scheme, violating the Commodity Exchange Act (CEA) and related CFTC regulations.
Each defendant will pay a $150,000 civil monetary penalty. Furthermore, Vorley and Chanu are both banned for five years from trading on any registered entity and are prohibited from registering with the CFTC in any capacity. They are also required to cease and desist from further violations of the CEA.
“This enforcement action demonstrates the CFTC’s commitment to aggressively pursuing individuals who spoof in our markets,” stated CFTC Acting Director of Enforcement Vincent McGonagle. “As this case shows, we will continue to work vigorously to hold individuals accountable, and not just the companies that employ them, for misconduct in our markets.”
The case stems from a complaint originally filed by the CFTC on January 26, 2018. The CME Group assisted the CFTC in its investigation. The investigation was led by Devin Cain, Katie Rasor, Janine Gargiulo, Ben Sedrish, Brandon Wozniak, Alben Weinstein, Patryk J. Chudy, Lenel Hickson, Jr., and Manal M. Sultan, with assistance from the Division of Enforcement’s Spoofing Task Force.
Source: CFTC.gov
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