CME permanently bans 3 traders for spoofing, other violations


The King Report headlined this story: "Guppies Get Punished, Whales Skate."

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By Tom Polansek
Monday, October 12, 2015

CHICAGO -- CME Group Inc. has permanently banned three traders who admitted to violations including the manipulative strategy known as spoofing, according to disciplinary notices issued on Monday.

A permanent ban is a severe punishment that CME, which owns the New York Mercantile Exchange, Comex, and other markets, does not often impose on traders who break the rules. The exchange operator more commonly uses fines and trading suspensions to discipline rule breakers.

On multiple occasions from February to April 2013, a trader named Nitin Gupta repeatedly entered large orders for crude oil, gold, silver, and copper futures contracts without the intent to trade, according to CME.

Nitin entered the orders to encourage others to trade opposite smaller orders that he had resting in the markets, the company said. After receiving a fill on his smaller orders, Nitin would then cancel the large orders, CME said.

Such moves are commonly called spoofing, a strategy in which a trader tries to create a false appearance of market interest by placing orders and then immediately canceling them.

CME fined Gupta a total of $150,000 in addition to imposing a ban. ...

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