Naperville, Illinois resident Jitesh Thakkar and his company, Edge Financial Technologies, Inc., are facing federal charges for aiding and abetting a manipulative trading scheme involving E-mini S&P futures contracts, the Commodity Futures Trading Commission (CFTC) announced today. The complaint, filed in the U.S. District Court for the Northern District of Illinois, alleges Thakkar and Edge designed and developed custom software used to spoof the market.
According to the CFTC, Thakkar, president of Edge and a veteran software developer for the trading industry, received a request in October 2011 from a cooperating trader, identified as “Trader A,” for software capable of spoofing – placing and canceling orders with no intention of execution – in the E-mini S&P market on the Chicago Mercantile Exchange. Thakkar and Edge programmers then collaborated with Trader A to build the application to his specifications.
The CFTC alleges Trader A subsequently engaged in thousands of manipulative acts through spoofing, facilitated by the software created by Thakkar and Edge. A key feature of the application, dubbed “Back-of-Book,” was specifically designed to aid in this illegal activity. This function automatically modified and canceled Trader A’s orders to obscure their true intent and create false signals of supply and demand.
Specifically, the Back-of-Book function repeatedly moved Trader A’s orders behind those of other market participants, reducing the likelihood of execution, and immediately canceled any portion of the order that *was* executed. This allowed Trader A to create the illusion of substantial buy or sell interest without actually intending to trade, deceiving other market participants. The alleged spoofing occurred between January 30, 2013, and October 30, 2013.
“In its effort to root out spoofing from our markets, the CFTC will work vigorously to hold accountable not only the individuals who engage in the spoofing, but also those who produce and sell the tools designed to spoof,” stated James McDonald, the CFTC’s Director of Enforcement. The investigation highlights the CFTC’s focus on not only prosecuting illegal trading activity but also those who enable it through technology.
The CFTC is seeking injunctive relief, disgorgement of ill-gotten gains, and civil penalties against Thakkar and Edge Financial Technologies. The specific amount of potential penalties has not been disclosed at this time.
Source: CFTC.gov
Related Federal Cases
- Denae Sullivan, Bank Fraud and Aggravated Identity Theft, Anchorage… · Illinois
- Two Foreign Nationals, ID Theft Scheme, Los Angeles CA, 2023 · Florida
- Yerfri Castillo, ID Theft Tax Scam, NY, 2023 · Illinois
- Letitia James Demands ICE Identity Disclosure, New York, 2023 · New Mexico
- Terry L. Gantt, ID Theft and Wire Fraud, Cedar Rapids IA, 2012 · Illinois
