Dallas, Texas – Sunoco LP will pay $450,000 to settle charges brought by the Commodity Futures Trading Commission (CFTC) for spoofing energy futures contracts, the agency announced Wednesday.
The CFTC alleges that between February 2014 and January 2015, Sunoco, through the actions of a former trader, engaged in a manipulative trading practice known as spoofing. This involved placing orders with no intention of executing them, designed to artificially influence market prices.
According to the CFTC’s order, the former trader would place a small, genuine order on one side of the market, intending to have it filled. Simultaneously, the trader would place significantly larger orders on the opposite side – often for 50 or 100 contracts – with the clear intent to cancel them before they could be executed. These larger orders were typically cancelled shortly after placement, often after the smaller, genuine order was filled.
The agency found that Sunoco is vicariously liable for the actions of its former trader, holding the company accountable for the disruptive and illegal trading activity. Spoofing is a form of market manipulation prohibited under the Commodity Exchange Act.
The case was pursued as part of the CFTC’s Spoofing Task Force, dedicated to uncovering and prosecuting instances of manipulative trading practices. Neel Chopra, Jeff Le Riche, and Jason Wright of the Division of Enforcement led the investigation.
The $450,000 civil monetary penalty is intended to deter future misconduct and ensure the integrity of energy futures markets, the CFTC stated.
Source: CFTC.gov
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