New York resident Simon Posen has been penalized by the Commodity Futures Trading Commission (CFTC) for engaging in a years-long pattern of spoofing – a manipulative trading practice involving the placement of orders with no intention of executing them. The CFTC issued an order on July 26, 2017, detailing the charges and settlement.
According to the order, Posen engaged in thousands of instances of spoofing between December 2011 and March 2015. He traded gold, silver, copper, and crude oil futures contracts on the Commodity Exchange, Inc., and the New York Mercantile Exchange, all from his personal account. Posen acted as an individual trader and was not affiliated with any company.
The CFTC found that Posen would place large “spoof” orders with the intent to cancel them before they could be filled. Simultaneously, he would place smaller, visible orders – known as “iceberg” orders – on the opposite side of the market. Once the smaller orders were executed, Posen would cancel the larger spoof order, repeating the process to create and then exit positions.
As a result of his actions, Posen has been ordered to pay a $635,000 civil monetary penalty. Furthermore, he is permanently banned from trading in any market regulated by the CFTC and is prohibited from applying for registration or seeking exemption from registration with the agency.
“Illegal spoofing disrupts trading in the markets, undermines market integrity, and can cause serious customer harm,” stated James McDonald, Director of the CFTC’s Division of Enforcement. “Individuals like Posen who spoof in our markets will face severe consequences.” McDonald also acknowledged the assistance of CME Group in the investigation.
The case was led by CFTC staff members James Deacon, Ilana Waxman, Jason Wright, Patrick Marquardt, Kara Mucha, Michael Solinsky, Elizabeth Davis, and Rick Glaser.
Source: CFTC.gov
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