WASHINGTON, D.C. – John Lawrence, a former trader at Heraeus Metals New York LLC, has been charged with spoofing in the silver and gold futures markets, the Commodity Futures Trading Commission (CFTC) announced on September 16, 2019. Lawrence engaged in the manipulative practice from at least May 2017 to January 2018, trading on the Commodity Exchange, Inc. (COMEX).
Spoofing involves placing orders with the intent to cancel them before execution, creating a false impression of market demand or supply. The CFTC found that Lawrence routinely placed small, genuine orders alongside significantly larger orders he intended to cancel – a tactic designed to induce other traders to fill his legitimate orders.
According to the CFTC, Lawrence’s scheme involved placing a one-lot order to be filled, then immediately entering a 20-lot order on the opposite side of the market with no intention of letting it execute. This created artificial pressure, prompting others to take the bait and fill his initial order. Once filled, Lawrence would cancel the larger, “spoof” order.
As a result of the investigation, Lawrence will pay a $130,000 civil monetary penalty and is suspended from trading on any CFTC-designated exchange, or with any CFTC-registered entity, for four months. He is also ordered to cease and desist from future violations of the Commodity Exchange Act’s spoofing prohibition.
Heraeus Metals New York LLC was found vicariously liable for Lawrence’s actions and will pay a $900,000 civil monetary penalty. The CFTC emphasized that the enforcement action demonstrates its commitment to holding both individual traders and their firms accountable for market manipulation.
The CFTC collaborated with the CME Group on this case, which also took disciplinary action against Lawrence. The investigation was led by Allison Sizemore, Thomas Simek, Christopher Reed, Charles Marvine, and former staff member Jim Humphrey of the CFTC’s Division of Enforcement.
Source: CFTC.gov
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