CFTC, former UBS trader Andre Flotron obtain Court approval for settlement
Andre Flotron, who was accused of engaging in an illicit practice known as “spoofing”, agrees to pay a civil monetary penalty in the amount of $100,000.
The Connecticut District Court has approved a Proposed Final Judgment and Consent Order in a case targeting Andre Flotron, a former UBS trader who was accused of engaging in an illicit practice known as spoofing.
Earlier this week, Judge Vanessa L. Bryant signed an Order adopting the proposed judgment submitted by the Commodity Futures Trading Commission (CFTC) in December 2018, shortly before the Government shutdown.
Let’s recall that Flotron, who is a Swiss national, was employed by UBS as a trader from at least 2008 to January 2014.
From at least August 2008 through at least November 2013, Flotron placed large orders in the precious metals futures markets with the intent to cancel the orders before execution. He intended for the spoof orders to induce other market participants to transact on smaller, “Genuine Orders” that he placed on the opposite side of the market.
When Flotron’s Genuine Order was a buy order, his Spoof Order was an offer to sell. In placing Spoof Orders to sell, he intended to send market participants a signal of greater supply to create the misimpression that the price would likely decline and trick market participants into transacting on his Genuine Orders to buy.
When Flotron’s Genuine Order was an offer to sell, his Spoof Order was a buy order. In placing Spoof Orders to buy, he intended to send market participants a signal of greater demand to create the misimpression that the price would likely rise and trick market participants into transacting on his Genuine Orders to sell.
In placing the Spoof Orders, Flotron gave market participants the impression that he actually wanted to buy or sell the number of contracts in the Spoof Orders when, in reality, he did not.
As per the consent order, the defendant is permanently restrained, enjoined and prohibited from engaging in trading, practices, or conduct on or subject to the rules of a registered entity that is, is of the character of, or is commonly known as “spoofing”. He is also prohibited from using or employing any manipulative device, scheme or artifice to defraud or engaging in any act, practice, or course of business, which would operate as a fraud or deceit upon any person.
The defendant is also restrained, enjoined and prohibited, for a period of one year from the date of entry of the consent order from trading on or subject to the rules of any registered entity, as well as from entering into any transactions involving “commodity interests”. He is also restrained and prohibited from controlling or directing the trading for or on behalf of any other person or entity in any account involving commodity interests, as well as from applying for registration or claiming exemption from registration with the Commission in any capacity, and engaging in any activity requiring such registration or exemption from registration with the Commission.
Finally, Flotron agrees to pay a civil monetary penalty in the amount of $100,000.