CHICAGO, Aug 22 (Reuters) - CME Group Inc on Monday suspended from its markets a futures trader who used the manipulative practice known as spoofing and was suspected of money laundering, the exchange operator said.
CME, which owns Comex, the Chicago Mercantile Exchange and other markets, barred Andrey Sakharov from trading for 60 days and could extend his ban, according to a disciplinary notice.
Contact information for Sakharov could not immediately be found.
On multiple dates starting last month, he entered electronic orders in CME’s gold and natural gas markets that he did not intend to trade, the disciplinary notice said.
The practice of placing bids to buy or offers to sell contracts with the intent to cancel them before execution is known as spoofing and is illegal. It is used to create an illusion of demand in markets, so that spoofers can influence prices to benefit their market positions.
Last month, a U.S. judge sentenced trader Michael Coscia to three years in prison for spoofing on futures markets run by CME and rival Intercontinental Exchange Inc. He was the first person criminally convicted of spoofing.
Sakharov entered trades in CME markets through accounts held in at least five other people’s names, according to CME’s notice.
He told a trading firm that while “he wanted to have individual access to these accounts, as well as future accounts he planned on opening with the firm, he did not want to be officially associated with the accounts since he was concerned that he may be banned from trading,” the notice said.
The trading firm, which was not named, told CME that an account Sakharov used “was reported to the Cyprus Securities and Exchange Commission following suspicions of money laundering,” the notice said.
In an unrelated case last year, two metals traders that CME suspended for spoofing through the same process used to discipline Sakharov were eventually banned permanently from U.S. trading. (Reporting by Tom Polansek; Editing by Jonathan Oatis)
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