Illinois Court agrees with DOJ to stay civil proceedings against traders accused of spoofing
The civil action was stayed for a period of two months, with leave for the Government to seek additional extension of the stay.
The Honorable Rebecca R. Pallmeyer of the Illinois Northern District Court has granted a motion by the United States Government to intervene in the civil proceedings against two traders allegedly involved in market manipulation. On May 2, 2018, the Judge signed an order to stay the civil case against James Vorley and Cedric Chanu for a period of two months. The initial status hearing set for May 7, 2018 is stricken and re-set to July 16, 2018.
The Department of Justice (DOJ) had asked for the stay in light of the parallel criminal prosecution.
Both the civil case and the criminal case target the same defendants—James Vorley and Cedric Chanu—and concern the same types of conduct, events, and overlapping time periods, the Government argued. Both complaints state that defendants Vorley and Chanu engaged in a form of fraud and manipulation known as “spoofing” (the unlawful practice of bidding or offering with the intent, at the time the bid or offer was placed, to cancel the bid or offer before it is executed) in the markets for precious metals futures contracts.
According to the CFTC complaint, the unlawful conduct lasted from around May 2008 through at least in or around July 2013. The criminal complaint alleges that the defendants’ scheme continued until in or around March 2015.
According to the DOJ, a stay of the civil case would preclude Vorley and Chanu from using 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 against the pending criminal case.
The Government noted that the stay would benefit the Court and the parties in the case by minimizing redundant litigation and narrowing the scope of discovery. In addition, such a stay is seen to relieve defendants Vorley and Chanu of having to choose between potentially invoking their rights against self-incrimination in this case (which could be used against them in the civil case) or testifying in the case (which could be used against them in the criminal case).
The case is captioned Commodity Futures Trading Commission v. Vorley et al (1:18-cv-00603).