DOJ charges three traders, two plead guilty, to spoofing and commodities fraud
The Department of Justice filed criminal charges Thursday against three former commodities traders for their alleged participation in a commodities fraud and spoofing conspiracy that resulted in more than $60 million in losses to investors. Krishna Mohan of New York, and Kamaldeep Gandhi of Chicago agreed to plead guilty to conspiracy to engage in wire fraud, commodities fraud and spoofing. Yuchun "Bruce" Mao, a citizen of the People's Republic of China, co-led a commodities trading team at an unnamed trading firm with operations in Chicago and New York and was also indicted on one count of conspiracy to commit commodities fraud, two counts of commodities fraud and two counts of spoofing. Mao is contesting the charges. From March 2012 through March 2014, Mao and others allegedly conspired to mislead the markets for E-Mini S&P 500 and E Mini NASDAQ 100 futures contracts traded on the Chicago Mercantile Exchange and E-Mini Dow futures contracts traded on the Chicago Board of Trade by placing thousands of orders that they did not intend to execute, or "spoof orders," in order to create the false and misleading appearance of increased supply or demand. Market participants that traded futures contracts in these three markets while the spoof orders distorted market prices incurred market losses of over $60 million.
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