Imprisoned ex-Deutsche Bank traders fined $150k for spoofing

Deutsche Bank agreed to pay more than $130 million to settle charges concerning the spoofing case, as well as for paying bribes to third parties to secure business deals in Asia and the Middle East.

The U.S. District Court for the Northern District of Illinois issued final judgments and consent orders against James Vorley and Cedric Chanu, former precious metals traders, for spoofing and engaging in a deceptive or manipulative scheme.

Judge Steven C. Seeger ordered a $150,000 civil monetary penalty on each defendant, a five-year ban from trading on or subject to the rules of any registered entity, and from registering with the CFTC in any capacity.

The case stems from a CFTC complaint filed against James Vorley and Cedric Chanu on January 26, 2018. According to the regulator, from approximately July 2011 through July 2013, Vorley and Chanu each placed orders for COMEX gold, silver, platinum, or palladium futures contracts that they wanted to get filled (genuine orders) and entered orders for the same contract on the opposite side of the market that they intended to cancel before execution (spoof orders).

The spoof orders were proof that Vorley and Chanu intentionally or recklessly sent market participants signals of greater supply or demand to create the misimpression that the price would move up or down and trick market participants to transact on smaller, genuine orders that they placed on the opposite side of the market, the CFTC explained. The defendants’ conduct constituted spoofing and a deceptive or manipulative scheme.

CFTC Acting Director of Enforcement Vincent McGonagle, said: “This enforcement action demonstrates the CFTC’s commitment to aggressively pursuing individuals who spoof in our markets. As this case shows, we will continue to work vigorously to hold individuals accountable, and not just the companies that employ them, for misconduct in our markets.”

James Vorley and Cedric Chanu were precious metals traders at Deutsche Bank in London and, in 2021, they were each sentenced by a federal jury in the Northern District of Illinois to one year and one day in prison for their fraudulent trades.

They placed numerous fraudulent precious metal orders on exchanges in New York, Singapore, and Hong Kong and canceled them just before execution.

Deutsche Bank agreed to pay more than $130 million to settle charges concerning the spoofing case, as well as for paying bribes to third parties to secure business deals in Asia and the Middle East.

Financefeeds.com