US Govt not willing to go on “international fishing expedition” for evidence in spoofing case

Maria Nikolova

The US Government opposes a request from a software developer accused of spoofing who wants access to documents possessed by the UK FCA and Police.

The United States Government has objected to a request by Jitesh Thakkar, a software developer accused of spoofing, over document production. Earlier this week, the US authorities filed their official response to Thakkar’s request.

Let’s recall that Thakkar has asked the Court to compel the Government to produce documents from the CFTC, U.K. Financial Conduct Authority, Metropolitan Police Service, and other British authorities. Thakkar, who is charged with spoofing and conspiracy to commit spoofing for trades made by London-based trader Navinder Sarao using the company’s software, says that, in order 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.

In its response, the US Government says it is not aware of any Brady or Giglio material in the possession of these independent agencies and thus is not seeking to avoid discovering or producing unfavorable facts. The government consulted with the CFTC and is not aware of any contemporaneous notes of the witness interviews identified in the Motion to Compel that the CFTC attended with the government. Should the government become aware of any such notes or other discoverable materials in the possession of the CFTC relating to these interviews, it will request them from the CFTC and review them for any discoverable material that has not already been summarized in the interview reports previously provided to the defendant.

To the extent the Motion is requesting more than the government’s good-faith undertaking with respect to the interviews attended by the CFTC, such requests, the Government says, lack basis in fact or law, and would amount to an interagency and international fishing expedition that could chill proper cooperation among independent agencies.

Any additional discovery the defendant seeks from these agencies – to the extent such materials even exist – would not be subject to the government’s discovery obligations. The Government notes that the CFTC is an independent agency that has conducted its own parallel civil investigation into Sarao and the defendant and that is not, and never has been, part of the government’s “prosecution team.” Also, the UK Financial Conduct Authority, Metropolitan Police Service, and other British authorities cited in Thakkar’s Motion are independent agencies of a foreign sovereign that, to the government’s knowledge, have not conducted any parallel investigation of these matters and have not carried out any “joint” investigation with the US government. The UK entities likewise are not, and never have been, part of the prosecution team.

Accordingly, the US Government insists defendant’s Motion should be denied.

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

Digital Assets

Himalaya Exchange customers seek release of frozen funds from DOJ

FormerFeds, a corporate defense and litigation service provider, has filed a lawsuit against the U.S. Department of Justice (DOJ) on behalf of over three and a half thousand Himalaya Exchange customers.

Digital Assets

Nubank, Circle, and Talos join forces for crypto adoption in Brazil

Nubank, the Brazilian neobank backed by Warren Buffett’s Berkshire Hathaway and Softbank Group Corp, announced new partnerships with cryptocurrency firms Circle and Talos.

Metaverse Gaming NFT

Flare onboards Ankr, Figment, Restake, and NorthStake as validators

Flare, an EVM smart contract platform known for its focus on blockchain data utility, has announced a major step in its development. The platform has onboarded leading infrastructure providers, including Ankr, Figment, Restake, and NorthStake.

Digital Assets

Sui Joins DeFi Leaders, Topping $100M in Bridged USDC

Sui, the groundbreaking Layer 1 blockchain created by the technology experts who led Meta’s Diem blockchain initiative and created the Move smart contract language, continues its explosive ascent in decentralized finance (DeFi). This week, it surpassed $100 million in bridged USDC. 

Digital Assets

Poloniex hit by UK regulator, listed as ‘unauthorised’ exchange

The UK’s Financial Conduct Authority (FCA) has added the cryptocurrency exchange Poloniex to its warning list of non-authorized companies. Poloniex, which is based in Seychelles, has experienced four hacks in the last two months and is affiliated with entrepreneur Justin Sun.

Industry News

Exclusive Markets is Proudly ISO/IEC 27001:2013 Certified by MSECB for Unparalleled Commitment to Information Security

Exclusive Markets, a leading name in the FINTECH sector, proudly announces the attainment of ISO/IEC 27001:2013 Certification by the MSECB. This esteemed certification highlights Exclusive Markets’ persistent commitment to fortifying information security within its cutting-edge trading technology. 

Digital Assets

SEC is discussing ‘technical details’ of Bitcoin EFTs ahead of approval

Discussions between the U.S. Securities and Exchange Commission (SEC) and asset managers seeking to list Bitcoin exchange-traded funds (ETFs) have reportedly advanced to key technical details.

Digital Assets

Versatus Labs Reaches $50 Million Valuation Following $2.3 Million Seed Funding Round

Versatus Labs, a peer-to-peer web services protocol aiming to help Web2 developers transition to Web3, has completed a $2.3 million funding round at a $50 million valuation led by key investors in the Web3 space including NGC Ventures and Republic Crypto. The latest funding round aims to help the company develop the ‘world’s first stateless roll-up’, Versatus LASR. This follows Versatus Labs’ recent pivot from Layer 1 solutions to Ethereum scaling solutions. 

Digital Assets

Binance ex-chief’s sentencing looms as court accepts his guilty plea

A U.S. district judge has accepted a guilty plea from former Binance CEO Changpeng Zhao (CZ) on charges related to anti-money laundering violations. The plea was accepted by Judge Richard Jones in the U.S. District Court for the Western District of Washington in Seattle.