Washington, D.C. – Kamaldeep Gandhi has been charged by the Commodity Futures Trading Commission (CFTC) with engaging in manipulative and deceptive schemes involving thousands of instances of spoofing – the practice of placing orders with no intention of executing them, designed to mislead other market participants. The charges stem from trading activity conducted between September 2012 and October 2014 while Gandhi was employed at two proprietary trading firms, referred to as Firm A and Firm B in the CFTC order.
The CFTC found that Gandhi, both independently and in concert with others, placed thousands of buy and sell orders for futures contracts on the Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, and Commodity Exchange, Inc., with the intent to cancel them before execution. This activity was designed to create false signals of supply and demand, manipulating the market to benefit Gandhi’s desired trades.
As part of a formal cooperation agreement with the CFTC’s Division of Enforcement, Gandhi admitted to the unlawful conduct. The order requires Gandhi to cease and desist from violating the Commodity Exchange Act’s prohibition on spoofing and manipulative practices. Crucially, the order permanently bans Gandhi from all trading and related activities in CFTC-regulated markets.
While monetary sanctions have not been immediately determined, the CFTC has reserved the right to assess penalties, contingent upon the continued cooperation of Gandhi with the Division of Enforcement. James McDonald, Director of Enforcement, emphasized the CFTC’s commitment to aggressively pursuing individuals who engage in spoofing, highlighting the agency’s use of cooperation programs to root out market misconduct.
In a parallel action, the Department of Justice, Fraud Section, also announced criminal charges against Gandhi. The CFTC’s Enforcement Division expressed gratitude for the assistance provided by the CME Group’s Market Regulation Department, the U.S. Department of Justice, and the Federal Bureau of Investigation. The case falls under the CFTC’s Spoofing Task Force, with Rachel Hayes, Rebecca Jelinek, Allison Sizemore, Stephen Turley, Peter Riggs, Chris Reed, and Charles Marvine leading the investigation.
Source: CFTC.gov
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