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CFTC orders two trading firms, bank to pay $3 million fine for spoofing

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Christian Fernsby ▼ | October 2, 2019
The U.S. Commodity Futures Trading Commission announced that civil enforcement actions were filed and simultaneously settled against two trading firms and one bank.
Morgan Stanley
America   Morgan Stanley
This is for violating the Commodity Exchange Act’s (CEA) prohibition on spoofing (bidding or offering with the intent to cancel the bid or offer before execution). These cases were brought in connection with the Division of Enforcement’s Spoofing Task Force.

Topics: CFTC trading firms bank fine

The CFTC on Monday, September 30, 2019 issued an order filing and settling charges against Morgan Stanley Capital Group Inc. for engaging in spoofing on multiple occasions in the precious metals futures markets from at least November 2013 to November 2014. The order requires Morgan Stanley to pay a civil monetary penalty of $1.5 million, to cease and desist from violating the CEA’s spoofing prohibition, and to take specified steps to implement and strengthen its training, systems, and controls to detect and deter spoofing in the futures markets.

The order recognizes Morgan Stanley’s significant cooperation with the CFTC’s investigation, and notes that Morgan Stanley’s cooperation and remediation resulted in a reduced civil monetary penalty.

The Division of Enforcement staff members responsible for this case are Lara Turcik, Brandon Wozniak, Candice Aloisi, Lenel Hickson, Jr., and Manal M. Sultan.

The CFTC on Monday, September 30, 2019 issued an order filing and settling charges against Belvedere Trading LLC, a proprietary trading firm in Chicago, Illinois, for engaging in acts of spoofing on hundreds of occasions in the Chicago Mercantile Exchange (CME) E-mini S&P 500 futures market. The order finds that Belvedere engaged in this unlawful activity through two of its traders from between June 2014 and February 2015 and during October 2015 and November 2015. The order requires Belvedere to pay a $1.1 million civil monetary penalty and to cease and desist from violating the spoofing prohibition of the CEA.

The order recognizes Belvedere’s early resolution of this matter in the form of a reduced civil monetary penalty.

The CFTC acknowledges and thanks the staff of the Market Regulation Department of the CME Group for their assistance in this matter.

The Division of Enforcement staff members responsible for this matter are Stephen Turley, Allison Sizemore, Rachel Hayes, Becky Jelinek, Chris Reed, and Charles Marvine, as well as former staff member Peter Riggs.

The CFTC on Monday, September 30, 2019 issued an order filing and settling charges against Mitsubishi International Corporation for engaging in multiple acts of spoofing on the Commodity Exchange, Inc. markets for silver and gold futures. This conduct occurred between at least April 2016 and January 2018. The order finds that Mitsubishi engaged in this unlawful activity through one of its traders who accessed these markets via an affiliate’s London office. The order requires Mitsubishi to pay a $400,000 civil monetary penalty and to cease and desist from violating the CEA’s spoofing prohibition.

The order recognizes that Mitsubishi promptly self-reported the misconduct and proactively implemented remedial measures and process improvements to deter and detect similar misconduct. The timely self-report, cooperation, and remediation resulted in a significantly reduced civil monetary penalty.

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