October 1, 2014

Federal Court Orders Eric Moncada to Pay $1.56 Million Penalty for Attempting to Manipulate the Wheat Futures Market

Order Finds that on Multiple Trading Days, Moncada Entered and Canceled Orders He Never Intended to Fill

Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained a federal court Consent Order against Defendant Eric Moncada, finding that Moncada attempted to manipulate the wheat futures markets on numerous occasions and imposing a $1.56 million civil monetary penalty and trading and registration restrictions. In July 2014, the court had issued an Order granting the CFTC summary judgment on charges that Moncada entered into fictitious sales and non-competitive transactions (see Order under Related Links).

The Court’s Orders arise out of the CFTC enforcement Complaint, filed on December 4, 2012 in the U.S. District Court for the Southern District of New York, charging Moncada and proprietary trading firms, BES Capital LLC (BES) and Serdika LLC (Serdika), with attempting to manipulate the price of the Chicago Board of Trade (CBOT) #2 Soft Red Winter Wheat Futures Contract on eight days in October 2009 and with entering into fictitious sales and non-competitive transactions on four days in October 2009 (see CFTC Press Release and Complaint 6441-12).

CFTC Director of Enforcement Aitan Goelman stated: “The Commission remains committed to protecting the integrity of the markets by prosecuting manipulative conduct of all forms, including the type of conduct engaged in by Moncada – the wholesale entering and cancelling of orders without the intent to actually fill the orders.”

According to the Consent Order, Moncada’s scheme was to electronically enter and immediately cancel numerous large-lot orders for CBOT wheat futures that he did not intend to fill. By such activity, Moncada intended to create a misleading impression of rising liquidity in the marketplace. The Order further finds that Moncada would then seek to take advantage of any price movements that may have resulted from this manipulative scheme by placing smaller orders, which he hoped to fill at prices beneficial to him, on the opposite side of market from his large-lot cancelled orders.

Specifically, in addition to the civil monetary penalty, the Order prohibits Moncada from trading any wheat futures products for a period of five years and prohibits Moncada from trading in any futures product or registering in any capacity with the CFTC for a period of one year.

On March 5, 2014, the court entered a default judgment Order against BES and Serdika, which included civil monetary penalties totaling $32.24 million and permanent trading and registration bans (see Order under Related Links).

The CFTC Division of Enforcement staff members responsible for this action are Andrew Ridenour, Jennifer Diamond, Jessica Harris, Erica Bodin, Elizabeth Davis, Rick Glaser, and Richard Wagner, as well as former Division of Enforcement staff Kenneth McCracken and Brian Walsh.

Media Contact
Dennis Holden
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Last Updated: October 1, 2014