Washington, D.C. – Mirae Asset Daewoo Co., Ltd. has been ordered to pay $700,000 in penalties by the Commodity Futures Trading Commission (CFTC) for engaging in spoofing activity in the Chicago Mercantile Exchange (CME) E-mini S&P 500 futures market, the agency announced today.
The CFTC alleges that Daewoo Securities Co. Ltd., a company acquired by Mirae Asset Daewoo, conducted the manipulative trading practices between December 2014 and April 2016. The spoofing was reportedly carried out by a trader based in Daewoo’s Seoul office.
According to the order, the trader employed a three-step strategy. Large, intentionally deceptive orders – dubbed “spoof orders” – were placed to create a false impression of market depth. This was designed to lure other traders into reacting to the manufactured buying or selling pressure. Simultaneously, a smaller, genuine order was placed on the opposite side of the market. Once the genuine order was executed, the trader immediately canceled the spoof order before it could be filled.
“This enforcement action demonstrates, once again, that the Commission will hold overseas entities that spoof in our markets accountable,” stated CFTC Director of Enforcement James McDonald.
The CFTC acknowledged Mirae’s cooperation throughout the investigation, which led to a reduction in the civil monetary penalty. The order also mandates that Mirae cease and desist from any further violations of the Commodity Exchange Act’s prohibition on spoofing.
The CFTC expressed gratitude for the assistance provided by the CME Group Inc., the Financial Services Commission of the Republic of Korea, and the United Kingdom Financial Conduct Authority in the investigation. The case was led by CFTC staff members Jonah E. McCarthy, Jennifer L. Blakley, Dmitriy Vilenskiy, A. Daniel Ullman II, Christine Ryall, and Paul G. Hayeck.
Source: CFTC.gov
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