US Department of Justice

US DOJ Charges Two Former Deutsche Traders with Spoofing

Brian A. Benczkowski
Brian A. Benczkowski

The US Department of Justice announced that two former Deutsche Bank traders have been charged with “manipulative trading practices in the commodities markets.”

The US DOJ made the announcement in a press release.

“Two former employees of Deutsche Bank AG, a global financial institution, were charged in an indictment returned by a Chicago federal grand jury yesterday with engaging in fraudulent and manipulative trading involving precious metals futures contracts, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge William Sweeney of the FBI’s New York Field Office.

“James Vorley, 38, of the United Kingdom, and Cedric Chanu, 39, of France and the United Arab Emirates, were each charged in the Northern District of Illinois with one count of conspiracy to commit wire fraud affecting a financial institution and one count of wire fraud affecting a financial institution.”

The announcement is part of a burgeoning case against traders from the European banks.

In June, the USDOJ reached a plea deal with David Liew, another former trader with the bank. Liew was accused of spoofing, where traders place orders they don’t intend to execute but rather to artificially drive the price of a security a certain way.

“Coordinated spoofing involved one or more additional participants. When engaging in coordinated spoofing, defendant LIEW and/or one or more co-conspirators would place one or more Spoof Orders on one side of the market in order to facilitate the execution of Primary Orders placed on the opposite side of the market by either LIEW or a coconspirator. For example, LIEW would place a Spoof Order in order to facilitate the execution of a Primary Order placed by a co-conspirator, or a co-conspirator would place a Spoof Order in order to facilitate the execution of a Primary Order placed by LIEW. At other times, LIEW and one or more co-conspirators would each place one or more Spoof Orders in order to facilitate the execution of a Primary Order placed by LIEW or a co-conspirator.” The US DOJ noted in the plea agreement.

Liew faces up to five years in prison and up to a $250,000 fine and still awaits sentencing.

Deutsche BankIn this case, the US DOJ noted: “The indictment alleges that Vorley and Chanu, who were employed as traders at Deutsche Bank AG—Vorley based in London; Chanu based in London and Singapore—engaged in a years-long conspiracy to defraud other traders on the Commodity Exchange Inc., which was an exchange run by the Chicago Mercantile Exchange Group.  The defendants and their co-conspirators, including former Deutsche Bank AG trader David Liew, are alleged to have defrauded other traders by placing fraudulent orders that they did not intend to execute in order to create the appearance of false supply and demand and to induce other traders to trade at prices, quantities and times that they otherwise would not have traded.  The indictment further alleges that Vorley, Chanu, Liew and others placed such fraudulent and manipulative orders by themselves and in coordination with other traders at Deutsche Bank AG, including each other.”