Michael Coscia and his company, Panther Energy Trading LLC, were fined $800,000 by CME Group Inc. (CME) and ordered to give back more than $1.3 million for allegedly manipulating electronic markets using algorithmic computer programs.
Coscia and employees at his firm developed a strategy where one small order was placed in the futures markets owned by CME Group at the best price to buy or sell, the company said in a series of disciplinary actions today. At the same time, several large orders were made on the opposite side of the trade, creating false price pressure, CME Group said. More than 98 percent of the time the orders were cancelled because they “were not intended to be traded,” CME Group said.
Coscia neither admitted nor denied any wrongdoing under the settlement.
In a separate statement, the Commodity Futures Trading Commission settled charges accusing Coscia and Panther Energy of “spoofing” markets and ordered them to pay $1.4 million in civil penalties and return $1.4 million in profit. The reimbursement of profits will be offset by any returned gains to CME Group by Coscia and his firm, the CFTC said. Coscia and his firm were barred from trading on any CFTC-regulated market for one year.
The trading system employed by Panther “misled market participants, including other algorithmic traders, and exploited that deception for Panther’s benefit,” CME Group said.
Coscia is responsible for $200,000 of the fine by CME Group and was barred from any floor-based or electronic trading on the company’s exchanges for six months. Panther Energy Trading was assessed the remainder, or $600,000.
Coscia and Panther Energy Trading couldn’t be immediately reached for comment.