CFTC, ex-trader Krishna Mohan reach settlement
The settlement order recognizes Mohan’s entry into a formal cooperation agreement with the CFTC’s Division of Enforcement.
The United States Commodity Futures Trading Commission (CFTC) has just announced the issuance of an Order filing and settling charges against Krishna Mohan, in which the former trader admits to engaging in manipulative and deceptive schemes involving spoofing (bidding or offering with the intent to cancel the bid or offer before execution).
The spoofing affected a variety of futures contracts traded on the Chicago Mercantile Exchange and Chicago Board of Trade. The Order finds that Mohan engaged in this unlawful activity while trading for his former employer, a proprietary trading firm named as “Firm A” in the Order.
The Order requires Mohan to cease and desist from violating the Commodity Exchange Act’s prohibition on spoofing and the use of manipulative and deceptive schemes. The Order also bans Mohan for three years from trading and other activities in CFTC-regulated markets. In addition, the Order recognizes Mohan’s entry into a formal cooperation agreement with the CFTC’s Division of Enforcement.
The regulator reserves its determination as to monetary sanctions against Mohan in recognition of his agreement to continue to cooperate with the CFTC’s Division of Enforcement.
The Order finds that from at least September 2012 through March 2014 at Firm A, Mohan, individually and in coordination with others, placed thousands of orders to buy or sell futures contracts with the intent to cancel those orders prior to execution. In doing so, he is said to have intentionally sent false signals of increased supply or demand designed to trick market participants into executing against the orders he wanted filled.
The CFTC previously filed charges against Mohan for this conduct in the U.S. District Court for the Southern District of Texas. That action was dismissed without prejudice in connection with the filing of an administrative proceeding.
The CFTC notes that, in a separate action, Mohan has recently pleaded guilty in the Texas Southern District Court of Texas to one count of conspiracy to commit wire fraud, spoofing, and commodities fraud, with regard to conduct similar to that in the CFTC action. The defendant is awaiting sentencing on that charge.
Let’s recall that, earlier in February, the Connecticut District Court approved a Proposed Final Judgment and Consent Order in a case targeting Andre Flotron, a former UBS trader who was accused of engaging in spoofing.