Judge Turns Up Heat on Accused Spoofer Oystacherby
Chicago trader must face both injunction hearing and trial
CFTC says Oystacher tried to manipulate futures prices
U.S. commodities regulators can seek to stop alleged spoofer Igor Oystacher from trading before a trial is held in their lawsuit pursuing a ban, a federal judge decided Thursday.
Oystacher, accused of trying to manipulate the prices of futures by placing orders without any intention of executing them, lost his bid to put off the Commodity Futures Trading Commission’s request for an injunction before the trial. His lawyers had argued that preparing for such a hearing would be like getting ready for the full-blown trial, and sought instead to expedite the trial itself.
U.S. District Judge Amy St. Eve in Chicago said procedural rules let the CFTC seek to stop Oystacher and his firm.
The lawsuit against Oystacher is one of multiple claims against traders alleging they engaged in spoofing, or manipulating market prices by placing large orders on one side of the futures market, canceling those orders and then executing smaller orders on the other side. Commodities trader Michael Coscia was convicted by a Chicago jury on Nov. 3 in the first criminal trial after the 2010 Dodd-Frank Act made such activity illegal in the futures markets.
Oystacher’s alleged spoofing occurred over 51 trading days from 2011 to 2014 on the Chicago Mercantile Exchange, the New York Mercantile Exchange and the Chicago Board Options Exchange, the CFTC said in its lawsuit. The CFTC said Oystacher spoofed in futures based on copper, natural gas, the S&P 500 equity index and an options volatility index.
Oystacher’s defense and the CFTC will appear on Dec. 21st to discuss related matters. A date will then be set for a full hearing on the trading injunction issue. St. Eve denied a motion by the defense to merge the CFTC’s request for an injunction with the spoofing trial.
The case is U.S. Commodity Futures Trading Commission v. Oystacher, 15-cv-09196, U.S. District Court, Northern District of Illinois (Chicago).