Aziz Abdel-Qader, 26 June 2019
Merrill Lynch Commodities, Inc. (MLCI) has just settled spoofing charges with the Commodity Futures Trading Commission (CFTC) by agreeing to pay a combined $36.5 million. The CFTC action centered on spoofing activity carried out by Bank of America’s global commodities trading business in a scheme that ran from 2008 through 2014 and involved dozens of fraudulent orders that were canceled before execution.
MLCI precious metals traders are accused of working with other traders to rig the purchase and sale of futures contracts on the Chicago Mercantile Exchange and the Chicago Board of Trade.
The DOJ also obtained an indictment against two former MLCI traders, Edward Bases and John Pacilio, who are charged not only with wire fraud in connection with alleged spoofing but also with conspiracy to commit commodities fraud and criminal commodities fraud.
Prosecutors filed a complaint describing the alleged plot, quoting conversations they purportedly had via online chat with other traders.
“Guys the [algorithms] are really geared up in here, if you spoof this it really moves,” the indictment states.