New York, NY – Commodity Futures Trading Commission (CFTC) enforcement actions have resulted in penalties for Thomas Donino and his former employer, FNY Partners Fund LP, stemming from charges of spoofing – a form of market manipulation. The CFTC announced the settlements on September 28, 2020, highlighting a case brought forth by the agency’s Spoofing Task Force.
Donino, a former trader at FNY Partners Fund LP, will pay a $135,000 civil monetary penalty and is suspended from trading on any CFTC-designated exchange, or with any CFTC-registered entity, for three months. He is also ordered to cease and desist from further violations of the Commodity Exchange Act’s spoofing prohibition. FNY Partners Fund LP has been found vicariously liable for Donino’s actions and will pay a $450,000 civil monetary penalty.
The investigation revealed that between January 2013 and January 2016, Donino engaged in a pattern of spoofing across several key futures markets, including soybean futures on the Chicago Board of Trade, gold futures on the Commodity Exchange (COMEX), and crude oil futures on the New York Mercantile Exchange. His method involved placing a small, legitimate order alongside a significantly larger order intended for cancellation.
Specifically, Donino would place a genuine order for a small number of contracts – typically 10 or fewer – and then immediately follow with a “spoof” order for five times that amount. He would then quickly cancel the spoof order, often after his genuine order had been filled. This tactic is designed to create a false impression of market depth and influence prices, ultimately deceiving other market participants.
“This enforcement action demonstrates the CFTC’s enhanced abilities to detect and prosecute spoofing using data analytics,” stated James McDonald, Director of the Division of Enforcement. “The CFTC will continue to identify and investigate spoofing and hold accountable both individual traders and the firms that employ them.”
The case was led by CFTC staff members Nicholas Sloey, Jeff Le Riche, Allison Sizemore, Jordon Grimm, and Neel Chopra.
Source: CFTC.gov
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