March 30, 2017

CFTC Orders Former Citigroup Global Markets Inc. Traders Stephen Gola and Jonathan Brims to Pay $350,000 and $200,000, Respectively, and Bans Them from Trading for 6 Months for Spoofing in U.S. Treasury Futures Markets

Each Trader Placed More than 1,000 Orders with the Intent to Cancel before Execution over Nearly an 18-Month Period

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued two separate Orders filing and settling charges against Stephen Gola and Jonathan Brims for spoofing — bidding or offering with the intent to cancel the bid or offer before execution — in U.S. Treasury futures markets while trading for Citigroup Global Markets Inc. (Citigroup). The CFTC previously issued an Order against Citigroup for its related violations of the Commodity Exchange Act and Regulations (see CFTC Press Release and Order 7516-17 January 19, 2017).

The Gola Order requires Gola to pay a $350,000 civil monetary penalty, and the Brims Order requires Brims to pay a $200,000 civil monetary penalty. Both traders are banned from trading in the futures markets until 6 months after each trader has made full payment of his respective penalty. In addition, Gola and Brims are ordered to cease and desist from violating the Commodity Exchange Act’s prohibition against spoofing, as charged.

The Orders find that, between July 16, 2011 and December 31, 2012, Gola and Brims each engaged in the disruptive practice of spoofing more than 1,000 times in various Chicago Mercantile Exchange (CME) U.S. Treasury futures products. According to the Orders, Gola’s and Brims’s spoofing strategy involved placing bids or offers of 1,000 lots or more with the intent to cancel those orders before execution. The spoofing orders were placed in the U.S. Treasury futures markets after another smaller bid or offer was placed on the opposite side of the same or a correlated futures or cash market, according to the Orders. Gola and Brims placed their spoofing orders to create or exacerbate an imbalance in the order book and cancelled their spoofing orders after either the smaller resting orders had been filled or the traders believed that the spoofing orders were at too great a risk of being executed, the Orders find.

In addition to executing the spoofing strategy individually, Gola and Brims coordinated with one or more Citigroup traders on the U.S. Treasury Desk to implement the spoofing strategy by, in some of those instances, placing one or more spoofing orders after another trader had placed one or more smaller resting orders in the same or a correlated futures or cash market, the Orders find. In other instances, another trader would place spoofing orders to benefit smaller resting orders of Gola and Brims, the Orders also find.

The CFTC thanks and acknowledges the assistance of the CME.

CFTC Division of Enforcement staff members responsible for this case are Margaret Aisenbrey, Christopher Reed, Allison Sizemore, Jessica Harris (former staff), Jennifer Blakley, Steve Yang, Daniel Jordan, Rick Glaser, and Charles Marvine.

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Last Updated: March 30, 2017