Australian trader accused of spoofing consents to extradition to the United States

Maria Nikolova

Even with the consent of Jiongsheng (“Jim”) Zhao, before his extradition can occur, the Australian Attorney General must authorize and sign a surrender order that formally authorises the extradition.

The United States authorities have asked for additional time to file the indictment against Jiongsheng (“Jim”) Zhao, an Australian trader accused of spoofing. On Friday, the authorities submitted their request with the Illinois Northern District Court.

The document, seen by FinanceFeeds, says that Zhao is currently facing extradition proceedings in the Commonwealth of Australia, and that on May 21, 2018, Zhao consented to extradition to the United States.

Even with ZHAO’s consent, however, before his extradition can occur, the Australian Attorney General must authorize and sign a surrender order that formally authorizes the extradition. After that order is issued, the United States has sixty days under the extradition treaty to take custody of Zhao and bring him to the United States for prosecution. Accordingly, until Australia issues the surrender order, and the United States is able to take Zhao into custody and bring him to the United States to make an initial appearance, he remains unavailable for prosecution in the United States.

In April this year, the Department of Justice made a similar announcement saying that Zhao was still unavailable for extradition. The Commodity Futures Trading Commission (CFTC) has also indicated that it will need a stay on the civil proceedings against Zhao, as the regulator admitted it needed more time to obtain service on the ex-trader.

Let’s recall that in January, 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).

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

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