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The Bracewell US Futures Exchanges Disciplinary Actions Report* says action has been taken against a trader in the UK who breached rules for trading.

From May 2016 to October 2016, an employee trading on behalf of himself and his firm through a profit sharing arrangement, engaged in a pattern of trading activity in the cocoa futures market which created certain order book imbalances.

The employee manually entered a large order relative to market conditions to buy or sell on one side of the market and a small reserve quantity order on the other side of the market. It appeared that the large orders were placed to induce others into transacting against the small reserve quantity orders.  Once the small reserve quantity order transacted, the employee cancelled the large orders on the opposite side of the market.

ICE’s Business Conduct Committee (BCC) determined that the firm was responsible for its employee’s actions in entering the large orders with the intent of cancelling them and misleading other market participants.

The firm was fined US$25,000, including disgorgement of US$9,150. The employee was given a 360-day suspension and a cease and desist notice.

In determining the penalty, the BCC took into account that the firm had trained the employee on spoofing and, when alerted, to the activity immediately fired the employee and disciplined his supervisor.

Further, the BCC noted that an automated exception reports which may have identified the employee’s manual trading activity was inadvertently not enabled for the cocoa futures market during the relevant time period.


*The Bracewell US Futures Exchanges Disciplinary Actions Report is a monthly report that provides summaries of certain disciplinary notices by US exchanges during the prior month. 


(photo: Neil Palmer, CIAT)

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