Traders Shouldn’t Get Prison Time in Spoofing Case, Probation Office Says
Dave Michaels, 25 May 2021
WASHINGTON—Two former Deutsche Bank traders convicted of manipulating precious-metals prices shouldn’t go to prison, federal probation officers recommended, sparking a backlash from prosecutors who sought terms of almost five years or more.
A federal jury in September convicted James Vorley and Cedric Chanu of wire fraud after a two-week trial over their trading of gold and silver on futures exchanges operated by CME Group Inc. Prosecutors alleged the pair engaged in spoofing, a type of rapid-fire market manipulation that traders and regulators say was once rampant in futures markets.
The Justice Department has made spoofing a centerpiece of its white-collar crime program; more than 20 people, many of them former employees of global banks, have been charged with spoofing-related crimes since 2014. But last year’s verdict was just the second trial conviction of a futures trader for spoofing. Eight traders have pleaded guilty and one was acquitted, while one other trial ended in a hung jury.
The government said in a court filing late last week that it “opposes, in the strongest possible terms,” the U.S. Probation Office’s recommendation that the two men not be imprisoned. The government urged a sentence of between 57 and 71 months. Messrs. Vorley and Chanu are due to be sentenced in late June.
“If hard-won trial convictions are not met with serious sentences, there is a real risk that market manipulation crimes will not be prosecuted,” prosecutors wrote in their sentencing.
