Roman Banoczay pays a CFTC penalty to settle market-manipulation case

abdelaziz Fathi

The Commodity Futures Trading Commission (CFTC) today settled spoofing charges against a Slovakian trader and his company.

The agency said Roman Banoczay Jr. (Banoczay Jr.) of Bratislava, Slovakia, as an agent of Roman Banoczay Sr. (Banoczay Sr.) and their company, BAZUR Spol. S.R.O. (BAZUR), will pay $750,000 in fines to resolve a a case accusing them of spoofing in the oil market.

In addition to the monetary sanctions, the order prohibits all three defendants from trading in commodity interests and registering with the CFTC in any capacity for two years. It also requires them to cease and desist from violating the CEA’s prohibitions on spoofing and other deceptive schemes.

Banoczay engaged in this strategy in multiple brokerage accounts that he controlled, sometimes simultaneously trading in the same security on multiple accounts.

The case covers a four-week period in early 2018 and relates to the practice of “spoofing,” where traders put in large orders to buy or sell a security with no intention of executing them, creating the appearance of demand or supply for a particular asset and helping move that asset in the trader’s desired direction.

It’s unlawful to submit and cancel orders in a strategy intended to deceive other traders, the CFTC said.

The complaint described a few examples of the alleged plot, explaining that a broker dealer where Banoczay had held his account spotted his manipulative trades, and then he closed his account.

“Banoczay Jr. placed thousands of orders with the intent to cancel them in order to send false signals of increased buying or selling interest designed to trick market participants into executing the orders that he wanted filled. Although Banoczay Jr. was the only individual who placed and canceled these spoof orders, the court found that Banoczay Sr. and BAZUR are vicariously liable for Banoczay Jr.’s violations because Banoczay Jr. served as their agent and committed these violations within the scope of his agency. Banoczay Jr. was previously the subject of a disciplinary action brought by the CME Group, Inc. for the same underlying conduct,” the CFTC said.

The case is the latest in a series of prosecutions brought by US regulators as they have cracked down on spoofing. Last month, JPMorgan Chase and two subsidiaries have reached a settlement agreement with US regulator to pay $60 million to resolve civil and criminal charges that its traders rigged precious metals futures and options.

The fine wraps up a long-running lawsuit that saw federal prosecutors at the Justice Department Fraud Section and top US regulators, the Commodity Futures Trading Commission and Securities and Exchange Commission, involved in the probes.

The spoofing lawsuit was originally filed against the US bank in 2015 by a hedge fund operator and two metals traders. At the time, JPMorgan denied the allegations and even managed to get the plaintiffs’ claims dismissed by a judge. However, the case was reopened in 2017 after four traders who had worked for the bank’s metals unit were arrested and charged in the probe.

 

Read this next

Digital Assets

Paxos opens R&D center in Israel to focus on transaction signing and crypto custody security

“Paxos is looking to expand its team in Israel in 2023 and beyond, giving engineers the opportunity to work on cutting-edge financial products and shape the future of the global economy.”

Executive Moves

Stash appoints Liza Landsman as CEO to further grow investing app

Stash is an investing and banking app with over 2 million active subscribers. Its subscription plans start at just $3 a month, and offer a range of products including investing, banking, education, and advice.

Institutional FX

Invast Global ramps up its offering with 10 soft commodity CFDs

Sydney-based prime-of-prime provider Invast Global has expanded its offering with the addition of ten soft commodity CFDs, which increases their index and commodity CFD offering to 35 instruments.

Retail FX

FF Simple and Smart Trades says Goodbye to CySEC authorization

The Cyprus Securities and Exchange Commission (CySEC) confirmed that it has wholly withdrawn the Cyprus Investment Firm (CIF) licenses of FF Simple and Smart Trades Investment Services Ltd.

Crypto Insider

Shining the Light in Crypto’s Dark Places

Something changed in regulators’ minds after the November crash of the FTX crypto exchange.

Executive Moves

Financial Commission Adds Sam Low to Dispute Resolution Committee

The Financial Commission (FinaCom PLC), a dispute resolution service that caters to the financial services industry, has appointed Sam Low as the newest member of its Dispute Resolution Committee (DRC).

Digital Assets, Uncategorized

De-facto owner of Bithumb exchange arrested in South Korea

South Korean prosecutors have arrested Kang Jong-Hyun, the anonymous chairman and owner of the country’s largest cryptocurrency exchange, Bithumb, on charges of embezzlement and stock manipulation.

Retail FX

Interactive Brokers volumes snap three-month losing streak

Electronic brokerage firm Interactive Brokers LLC (NASDAQ:IBKR) said its trading volumes rose in January, an indication that investor confidence in the financial markets is rebounding after having been fairly mixed over the past few months.

Digital Assets

VVF invests $5 million in Everscale, a potential Layer 2 solution for Venom blockchain

“For us, this is a strategic investment aimed at the technological development of projects and teams around technologies that we focus on and actively develop. In particular, we are talking about the Venom blockchain project and its ecosystem, which is planned to be launched soon and for which Everscale is a potential Layer 2 solution.”

<