CFTC Charges Proprietary Trader with Spoofing in Soybean Futures Markets
January 31, 2019
Washington, DC — The Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against Kevin Crepeau, of Chicago, Illinois, a trader at a proprietary trading firm, for engaging in spoofing in the Chicago Mercantile Exchange (CME) soybeans futures market.
James McDonald, CFTC’s Director of Enforcement, said, “As this case shows, we will continue to work tirelessly to preserve the integrity of our markets, and to protect those who rely on them to hedge their business risk – like the farmers and ranchers who participated in the agricultural markets at issue here. In pursuing this goal, we will continue to work closely with our regulatory and law enforcement partners, as we did in this case.”
The CFTC Order requires Crepeau, among other things, to pay a $120,000 civil monetary penalty, and imposes a four-month suspension from trading on all registered entities and in all commodity interests.
The CFTC Order finds that between August 2013 and June 2016, Crepeau placed orders to buy or sell futures contracts on soybeans, soybean meal, and soybean oil with the intent to cancel the orders before execution. According to the Order, Crepeau used an automated tool to place relatively small bids or offers on one side of the market (Genuine Orders) and Crepeau manually placed relatively large bids or offers on the opposite side of the market (Spoof Orders). Crepeau placed the Spoof Orders with the intent to induce other market participants to fill his Genuine Orders on the opposite side of the market and cancelled the Spoof Orders after the Genuine Orders had been filled. The Order finds that Crepeau repeated this trading pattern numerous times.
The CFTC’s investigation was conducted in conjunction with a related inquiry by the CME Group, which today also announced a disciplinary action against Crepeau. The CFTC thanks CME Group for its assistance in this matter.
This case is brought in connection with the CFTC Division of Enforcement’s Spoofing Task Force, and the staff members responsible for this case are John Buffington, Christine Ryall, and Paul Hayeck.