Software developer accused of spoofing seeks info from CFTC and FCA

Maria Nikolova

Jitesh Thakkar is charged with spoofing and conspiracy to commit spoofing for trades made by London-based trader Navinder Sarao using Thakkar’s company software.

As the trial in the criminal case targeting Jitesh Thakkar, a software developer accused of conspiracy to commit spoofing, approaches, the efforts to boost the defense and secure all necessary evidence intensify.

Late last week, the defense counsel filed a Motion to compel with the Illinois Northern District Court. In the document, the defendant asks the Court for entry of an order compelling the government to produce all Brady, Giglio, and Jencks Act materials in the possession of the United States Commodity Futures Trading Commission (CFTC) and to make a good faith effort to obtain and produce all such material in the possession of the UK Financial Conduct Authority, the Metropolitan Police Service, and other British authorities.

Let’s translate this into more human terms. The Brady materials are those that include exculpatory evidence to the defendant. Giglio materials cover impeaching information too. Hence, on top of the exculpatory evidence, the government is required to provide all information that tends to challenge the credibility of its witnesses. Finally, under the Jencks Act, a party calling a witness is required to produce any recorded statements of that witness related to the witness’s testimony.

Jitesh Thakkar is the owner of a small software company in Chicago called Edge Financial Technologies Inc. He is charged with spoofing and conspiracy to commit spoofing for trades made by London-based trader Navinder Sarao using the company’s software. To investigate Jitesh Thakkar and Sarao, the Department of Justice (DOJ) and FBI partnered with the CFTC in the United States and with UK regulators. Because those entities were part of the investigative team in this case, the defense counsel insists that the US government is obligated to produce Brady, Giglio, and Jencks Act materials in the possession of those entities.

Let’s recall that, on February 14, 2018, Jitesh Thakkar was charged in an indictment filed in the Northern District of Illinois with one count of conspiracy to commit spoofing and two counts of spoofing. Thakkar appeared for his arraignment on the indictment on February 22, 2018.

The indictment alleges that between October 2011 and April 2015, Thakkar and his co-conspirators engaged in a conspiracy to engage in spoofing—that is, bidding and offering with the intent, at the time the bid or offer was entered, to cancel the bid or offer before execution—through the placement of thousands of orders on the Chicago Mercantile Exchange (CME). The indictment alleges that Thakkar and his co-conspirators developed and delivered a customized software program that was used by Thakkar’s co-conspirator to engage in spoofing, including in the market for E-Mini S&P 500 futures contracts (“E-Mini”) on the CME. The indictment further charges Thakkar with spoofing in the E-Mini market on or about February 25, 2013 and March 8, 2013.

According to the allegations, it was the purpose of the conspiracy for Thakkar and his co- conspirators to unlawfully enrich themselves by:

  • developing a customized, automated program designed to place certain orders into the market while mitigating the risk that these orders would be “hit,” or executed;
  • selling, delivering, and attempting to sell and deliver the customized automated program to traders, so that the traders can use the program to place orders into futures markets, including the market for E-Mini futures contracts, that they intended to cancel before execution.

Read this next

Retail FX

ThinkMarkets expands CFDs lineup to over 4000 ETFs and shares

ThinkMarkets has expanded its service offering by incorporating 2500 new CFDs on shares and ETFs on its ThinkTrader platform.

Retail FX

France regulator warns investors of Omega Pro, Businessempire.fr

France’s financial markets regulator alerted investors that scams related to Omega Pro Ltd are beginning to circulate, with the blacklisted firm capitalizing on the situation to run a range of “unrealistic” offers.

Digital Assets

Web3 platform Grand Time paid $2 million in token earnings to date

Community-driven Web3 platform Grand Time said its offering – which includes a multifaceted platforms and its native token – has been gaining significant traction highlighted by impressive operational metrics.

Institutional FX

FX volumes at MOEX halved in April as ruble gains gorund

Currency trading at Moscow Exchange (MOEX) halted its upward route in April as monthly volumes nearly halved from a month earlier.

Digital Assets

FTX US adds stock trading, fractional shares to crypto platform

FTX US, the American subsidiary of crypto exchange FTX has kicked off stock trading feature to its customers in an effort to compete with popular platforms such as Robinhood and eToro.

Industry News

UK FCA empowered to remove brokers’ permissions in 28 days

Businesses with permissions they don’t need or use, risk misleading consumers. These new powers will enable us to take quicker action to cancel permissions that are not used or needed.

Industry News

CFTC charges $44m Ponzi scheme but millions may have fled to foreign crypto exchange

The CFTC alleged that defendants transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were returned to the pool.

Technology

Saxo Bank deploys Adenza to address Basel and EBA requirements

The integration of ControllerView will enhance Basel-driven capital calculations and reporting at Saxo Bank in support of the bank’s multijurisdictional capital and liquidity reporting requirements throughout Denmark, Switzerland and UK, with plans to expand into the Netherlands.

Executive Moves

ComplySci appoints CTO, CPO, and CLO to further regtech’s product expansion

ComplySci offers compliance software used by more than 1400 global institutions to identify risk and address regulatory compliance challenges.

<