A New York trader who engaged in thousands of incidents of "spoofing" in the gold, silver, copper and crude oil futures markets has been ordered to pay $635,000.
The U.S. Commodity Futures Trading Commission on Wednesday said Simon Posen must pay the civil penalty and will be banned permanently from trading on its regulated markets for "spoofing," in which bids or offers are made with the intent of canceling them before execution.
According to the commission, between December 2011 and March 2015, Posen put in orders to buy and sell gold, silver, copper and crude oil futures contracts with the intent to cancel the orders before they were executed.
Posen "engaged in a pattern" in which he would place a large spoof order and then place one or more smaller orders on the other side of the market, the commission said. Once those smaller orders were filled, Posen would then cancel the large spoof order.
In a statement, James McDonald, the director of the commission's enforcement division, said that spoofing "disrupts trading in the markets, undermines market integrity, and can cause serious customer harm."
"Individuals like Posen who spoof in our markets will face severe consequences. Indeed, Posen's conduct here warranted not only a substantial monetary penalty, but also a permanent ban from trading in our markets," McDonald added.
In June 2015, Posen agreed to pay a $75,000 fine and be suspended from the Commodity Exchange Inc. Group market for five weeks for making orders in gold and crude oil futures without intent to trade.