Australian trader accused of spoofing appears in US Court following his arrest

Maria Nikolova

The Illinois Northern District Court orders that Jiongsheng “Jim” Zhao shall remain in federal custody until further order of the court.

There has been some development regarding the US criminal proceedings against Jiongsheng “Jim” Zhao, an Australian trader accused of “spoofing”.

After months of formal procedures delaying the extradition of Zhao to the United States, the trader finally appeared in US Court this week. A status hearing was held at the Illinois Northern District Court on Tuesday, November 20, 2018. Jiongsheng Zhao appeared in response to his arrest on November 16, 2018.

The court found probable cause and ordered the defendant to be bound to the District Court for further proceeding. Zhao will remain in federal custody until further order of the court.

Let’s recall that in January this year, the United States Department of Justice charged Jiongsheng (“Jim”) Zhao, 30, of Australia, in a criminal complaint with wire fraud, commodities fraud, making false statements to the CME, and spoofing offenses when he was a trader at a proprietary trading firm located in Sydney, Australia. According to the complaint, data analysis identified hundreds of instances of spoofing by Zhao on the CME between approximately July 2012 and March 2016. Additionally, the complaint alleges that Zhao made false written statements to the CME after being confronted with allegations of his disruptive trading practices.

Zhao is alleged to have engaged in the deceptive pattern approximately 2,300 times, which included 3,100 discrete instances of spoofing (bidding or offering with the intent to cancel the bid or offer before execution).

On January 29, 2018, the defendant was arrested by the Australian Federal Police and was remanded into custody pending extradition. On May 21, 2018, he consented to extradition to the United States.

The criminal case against the trader is captioned USA v. Zhao (1:18-cr-00024).

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