High-Frequency trader convicted in first federal prosecution of "spoofing" charges
Michael Cosiscia was convicted for disrupting commodity futures prices in a $1.4 million fraud scheme marking the first federal prosecution of its kind.
High-frequency trader Michael Cosiscia was convicted in an Illinois district court for disrupting commodity futures prices in a $1.4 million fraud scheme marking the first federal prosecution of its kind.
Cosiscia commissioned two computer algorithms to carry out an automated trading technique known as “spoofing” to earn illegal profits from orders placed through Chicago and London based firms, according to a Nov. 3 Department of Justice release.
He was convicted on six counts of commodities fraud, each of which carries a maximum sentence of 25 years in prison and a $250,000 fine; and six counts of spoofing, each of which carries a maximum of 10 years in prison and a $1 million fine, the release said.
Cosiscia's case is the first federal prosecution under the anti-spoofing provision that was added to the Commodity Exchange Act by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, according to the release.