WASHINGTON, December 26, 2016 — The Commodities Future Trading Commission (CFTC) announced a fine for a trading company it accused of using “a manipulative and deceptive device while trading futures on four different futures exchanges.”
The CFTC announced that the Federal court in the Northern District of Illinois had levied the fine of $2.5 million against 3 Red Trading of Chicago, Illinois. According to a press release from the CFTC,
“Specifically, the Order finds that Oystacher and 3Red intentionally and repeatedly engaged in a manipulative and deceptive spoofing scheme while trading the spot-month contracts in the E-Mini S&P 500 futures contracts on the Chicago Mercantile Exchange (CME); crude oil and natural gas futures contracts on the New York Mercantile Exchange (NYMEX); copper futures contracts on the Commodity Exchange Inc. (COMEX); and the volatility index (VIX) futures contract on the CBOE Futures Exchange (CFE) on at least 51 trading days between December 2011 and January 2014.”
The CFTC first formally accused 3 Red Trading and its founder, Igor B. Oystacher, of deceptive practicesin October, 2015.
Dodd-Frank, the landmark financial reform bill passed by Congress and signed into law, contains a section prohibiting spoofing, precisely what 3 Red Trading is accused of doing. In the case of financial instruments, spoofing is the practice, generally undertaken by high frequency traders (HFTs), whereby a plethora of buy or sell orders are placed by the HFTs’ high speed computers within a tiny window of time.
There is no intent to execute these orders, however. They are canceled or withdrawn in less than a second, in order to manipulate the price of the underlying the security when bid-ask spreads are accessed on slower computing and order taking systems. The offending HFT orders are recalled immediately after the price goes the way the trader wants while regular firms and individual traders are still seeing the essentially fake prices (spoofed prices) on their systems and buy and sell accordingly. The HFTs pocket the difference.
Read more at https://www.commdiginews.com/busine...g-chicago-hft-firm-75818/#yVkxwXFf5iVLbyUc.99
The CFTC announced that the Federal court in the Northern District of Illinois had levied the fine of $2.5 million against 3 Red Trading of Chicago, Illinois. According to a press release from the CFTC,
“Specifically, the Order finds that Oystacher and 3Red intentionally and repeatedly engaged in a manipulative and deceptive spoofing scheme while trading the spot-month contracts in the E-Mini S&P 500 futures contracts on the Chicago Mercantile Exchange (CME); crude oil and natural gas futures contracts on the New York Mercantile Exchange (NYMEX); copper futures contracts on the Commodity Exchange Inc. (COMEX); and the volatility index (VIX) futures contract on the CBOE Futures Exchange (CFE) on at least 51 trading days between December 2011 and January 2014.”
The CFTC first formally accused 3 Red Trading and its founder, Igor B. Oystacher, of deceptive practicesin October, 2015.
Dodd-Frank, the landmark financial reform bill passed by Congress and signed into law, contains a section prohibiting spoofing, precisely what 3 Red Trading is accused of doing. In the case of financial instruments, spoofing is the practice, generally undertaken by high frequency traders (HFTs), whereby a plethora of buy or sell orders are placed by the HFTs’ high speed computers within a tiny window of time.
There is no intent to execute these orders, however. They are canceled or withdrawn in less than a second, in order to manipulate the price of the underlying the security when bid-ask spreads are accessed on slower computing and order taking systems. The offending HFT orders are recalled immediately after the price goes the way the trader wants while regular firms and individual traders are still seeing the essentially fake prices (spoofed prices) on their systems and buy and sell accordingly. The HFTs pocket the difference.
Read more at https://www.commdiginews.com/busine...g-chicago-hft-firm-75818/#yVkxwXFf5iVLbyUc.99
