Extradition procedure weighs on CFTC action against Australian trader accused of spoofing

Maria Nikolova

Jiongsheng (“Jim”) Zhao is currently in police custody in Australia, and is still awaiting extradition to the United States, so the CFTC asks for a brief stay of the civil proceedings against him.

The United States Commodity Futures Trading Commission (CFTC) will need more time to proceed with its civil lawsuit against Jiongsheng (“Jim”) Zhao, an Australian trader accused of spoofing. This is indicated by documents filed by the US regulator with the Illinois Northern District Court on Thursday, June 14, 2018.

The CFTC informs the Court that it remains unable to confer presently with Zhao as required. Accordingly, the regulator requests that the Court temporarily stays the deadlines for an initial status conference and a status report. Zhao is currently in police custody in Australia, and is awaiting extradition to the United States in connection with a criminal case filed against him in the Illinois Northern District Court.

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.

This has been the reason for the delay in the criminal proceedings against Zhao too.

In its Complaint, the CFTC alleges that from at least July 2012 through at least March 2017, Zhao repeatedly engaged in manipulative or deceptive acts in the E-mini S&P 500 futures contract market on the Chicago Mercantile Exchange (CME). Zhao is alleged to have employed a practice known as “spoofing” (bidding or offering with the intent to cancel the bid or offer before execution). He placed an order that he wanted to execute and thereafter entered a larger order on the opposite side of the market that he intended to cancel before execution. In placing these larger spoof orders, Zhao intentionally or recklessly sent false signals of increased supply or demand designed to trick market participants into executing against the orders he wanted filled.

Zhao is alleged to have engaged in the deceptive pattern approximately 2,300 times, which included 3,100 discrete instances of spoofing.

The CFTC is seeking civil monetary penalties, disgorgement of ill-gotten gains, trading and registration bans, and a permanent injunction against further violations of the federal commodities laws.

The case is captioned Commodity Futures Trading Commission v. Zhao (1:18-cv-00620).

Read this next

Institutional FX

Euronext’s FX volume takes yet another step back in July

Pan-European exchange, Euronext has reported a 7.6 percent drop in the average daily volume on its spot foreign exchange market. The ADV figure stood at $21.4 billion in July 2022, which is down from June’s $23.1 billion.

Executive Moves

IG Group strengthens institutional sales with appointment of Glen Hastings

IG Group, Europe’s largest online trading platform, has onboarded Glen Hastings to the role of its institutional sales manager. He joins the FCA-regulated broker with immediate effect, based out of its offices in London.

Digital Assets

Voyager customers can withdraw up to $100K in cash via ACH transfer

Following approval of the bankruptcy judge, cryptocurrency brokerage firm Voyager plans to return $270 million in customer cash. The amount represents a small portion of investors’ crypto holding that have been locked up since the company filed for bankruptcy in April.

Retail FX

Britain’s lifeboat system to conclude LCG compensation scheme

Britain’s Financial Services Compensation Scheme (FSCS) said today it’s preparing to close the compensation scheme of the collapsed mini-bond provider, London Capital & Finance.

Uncategorized

Robinhood parts ways with its first CPO Aparna Chennapragada

In what apparently part of the restructuring it announced last month, Robinhood is parting ways with its Chief Product Officer Aparna Chennapragada. However, she’ll remain employed in an advisory role to the CEO through January 2023.

Digital Assets

Crypto.com expands regulatory footprint with new licence in South Korea

Crypto.com has acquired payment service provider ‘PnLink Co., Ltd.’ and virtual asset service provider ‘OK-BIT Co., Ltd.’ The move effectively provides a regulatory stamp for the company’s digital assets and cryptocurrencies business in South Korea.

Metaverse Gaming NFT

Why NFT Technology Could be the Much Needed Solution to Crypto Inheritance 

The digital asset market may have started with Bitcoin’s humble beginning but its fortunes have changed over the past decade.

Industry News

Kohle Capital Markets expands CFDs lineup to 200+ stocks

Kohle Capital Markets (KCM), the leading international provider of online trading, has once again expanded its contracts-for-difference (CFDs) offering, this time with the addition of new products on its trading platform.

Industry News

Kohle Capital Markets continues CSR initiatives with donation of art piece to Lions Club International

Global brokerage firm Kohle Capital Markets (KCM) is taking its corporate social responsibility very seriously and continues to navigate the challenging period brought forth by the pandemic and Russia-Ukraine war.

<