DOJ’s attempt to stay CFTC action encounters traders’ opposition

Maria Nikolova

The requested stay, if granted, would prejudice the defendants, says Michael Nowak, who stands accused of spoofing.

Less than a month after the United States Department of Justice (DOJ) requested to intervene and stay a civil action brought by the Commodity Futures Trading Commission (CFTC) against Michael Thomas Nowak and Gregg Francis Smith, the defendants have made it clear that they oppose the DOJ’s request.

In a set of documents submitted at the Illinois Northern District Court on November 27, 2019, Nowak and Smith who stand accused of spoofing object to the DOJ’s plans.

Let’s recall that, the DOJ (i) seeks leave to intervene in the civil action; and (ii) moves for a stay of the CFTC action through the conclusion of the parallel criminal prosecution – United States v. Smith, et al., Case No. 19 CR 669 (N.D. Ill.).

In its Motion, the DOJ notes that the criminal case includes both defendants to this civil case – Michael Nowak and Gregg Smith – and substantially the same conduct, events, and time period. The government argues that the requested stay would benefit the Court and all parties by minimizing redundant litigation, narrowing the scope of discovery and issues to be adjudicated in this case, and relieving Nowak and Smith of the choice of having to choose between potentially invoking their rights against self-incrimination in this civil case (which invocation could be used against them in this case) or testifying in this case (which testimony could be used against them in the criminal case).

Further, according to the DOJ, a stay is needed to preclude Nowak and Smith from impermissibly taking advantage of the civil discovery process to circumvent the limitations on criminal discovery that protect the integrity of criminal prosecutions, and to allow the defendants the ability to focus their resources on defending the pending criminal case.

In his opposition to the DOJ’s request, Nowak notes that Courts have uniformly held that a stay is appropriate only in unique circumstances, and where necessary to avoid significant prejudice. The defendants’ use of civil discovery rules to obtain the discovery to which they are entitled does not pose a risk of cognizable prejudice or harm to the government, and does not justify the extensive stay the DOJ seeks, Nowak argues.

According to him, the requested stay, if granted, would prejudice the defendants by substantially delaying the time-consuming process of discovery in the CFTC Case, which in turn will further prolong and delay a resolution of this action.

A more limited stay, permitting document discovery to proceed but otherwise pausing the action, would better balance the competing interests of the parties and the public, according to the defendants. Such a stay would protect the criminal process as well as the defendants’ rights, but also vindicate the defendants’ interests in proceeding as expeditiously as possible to resolve the CFTC Case.

Read this next

Industry News

Citi fined £61 million after $189 billion algo order by mistake

The regulator noted that some primary controls at Citi were absent or deficient. In particular, there was no hard block that would have rejected this large erroneous basket of equities in its entirety and prevented any of it reaching the market.


Retik Finance Uniswap Listing Shocker: Why Presale Investors Are Abandoning $RETIK for BlockDAG’s Astounding 30,000x ROI

Explore how major influencers champion BlockDAG’s 30,000X ROI, overshadowing Retik Finance’s Uniswap listing and shifting investor focus.


Crypto Influencer ‘Crypto Jogi’ Names BlockDAG the Leading Investment for 2024, Outshining Retik Finance Exchange Listing

Explore why ‘Crypto Jogi’ has singled out BlockDAG as the investment to watch in 2024, shifting focus from Retik Finance’s upcoming exchange listings.


Over the Moon or Lost in Space? MoonBag Presale vs. Retik Finance and Pepe Coin

Discover why MoonBag presale is the best crypto presale 2024, surpassing Pepe Coin and Retik Finance with innovative features and high returns. Don’t miss out!

Digital Assets

Uniswap challenges SEC’s planned lawsuit over decentralized exchange

Decentralized finance (DeFi) exchange Uniswap is moving to address a looming regulatory spat with the U.S. Securities and Exchange Commission (SEC).

Digital Assets

Solana trader turns $2K into $2.26 million with 1DOL bet

The Solana ecosystem has proven to be a profitable environment for both savvy traders and lucky speculators. In line with this trend, memecoin trader invested 2,275worth of Solana (SOL) to buy a stash of meme coins, which then became worth $2.26 million in just eight hours.

Executive Moves, Uncategorized

Bitget appoints Gracy Chen as CEO

“I’m extremely honored to step into the role of CEO at Bitget. Over the past six years, we’ve built a robust foundation and an incredible team. Bitget has transformed into a leading crypto platform, consistently innovating to create value for our 25 million users. I’m excited to lead our global expansion to new heights.”

Digital Assets

Seven crypto exchanges pull out of license race in Hong Kong

The number of cryptocurrency exchanges seeking operational licenses in Hong Kong is steadily decreasing as the deadline approaches. Most recently, three crypto exchanges withdrew their license applications filed with the Securities and Futures Commission of Hong Kong (SFC).