First US trader convicted of ‘spoofing’ gets three years

Prosecutors had sought a sentence of at least five years and 10 months, while lawyers for the trader, 54-year-old Michael Coscia, had asked for probation. In November, a Chicago jury found him guilty of manipulating commodity futures prices in a scheme that yielded him $ 1.4 million.

The case against Coscia, head of futures trading firm Panther Energy Trading, was the first criminal prosecution of a trader for spoofing after it was explicitly outlawed by the 2010 Dodd-Frank financial-overhaul law.

The tactic, which involves entering large orders a trader doesn’t intend to execute to move prices in the trader’s favor, has since come under increased scrutiny from regulators and law enforcement.

A lawyer for Coscia, Stephen Senderowitz, said he plans to appeal the verdict on several issues, including whether the Dodd-Frank spoofing provisions are unconstitutionally vague, and plans to ask the court to allow Coscia to delay his prison term while the appeal is heard.

In a separate spoofing case, a federal judge in Chicago on July 12 allowed trader Igor Oystacher to continue some limited trading while he awaits trial on civil allegations from the US commodities regulator.

In requesting Coscia’s sentence, prosecutors said in court documents: “This court now has the opportunity to send a message, loud and clear, that our financial markets operate on principles of honesty and transparency, and do not allow a select few traders to profit in the trading markets through illegal bait and switch schemes at the expense of other traders.”

Coscia’s lawyers had countered that the trader had used a single trading strategy over a 10-week period in 2011, which he “immediately stopped using” after exchange regulators notified him of concerns.

At his trial in the fall of 2015, prosecutors in Chicago argued Coscia engaged in spoofing in markets for gold, soybean meal, soybean oil, high-grade copper and currency futures.

Write to Aruna Viswanatha at

This article was published by The Wall Street Journal

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