The founder of a Chicago technology consulting firm was among eight people and three multinational banks charged Monday by federal authorities with committing commodities fraud through so-called spoofing trades.
Federal officials said Jitesh Thakkar, founder of Loop-based Edge Financial Technologies, was arrested Monday in Illinois.
In a criminal complaint, Thakkar, 41, of Naperville, is accused of developing a software program that helped an unnamed commodities trader engage in “spoofing,” placing thousands of bids or offers on the E-mini S&P, a market on the Chicago Mercantile Exchange, with the intent of canceling the trades before they were executed, but after bids were placed on the other side of the market. Thakkar was not immediately available for comment.
The Commodity Futures Trading Commission also filed suit in federal court in Chicago against Thakkar and many of the others accused of spoofing fraud.
Also Monday, regulators and the Justice Department said they settled spoofing allegations against UBS, HSBC and Deutsche Bank. Deutsche Bank will pay a $30 million penalty; UBS, $15 million and HSBC, $1.6 million.
Criminal charges also were filed in federal court in Chicago against James Vorley, 37, of the United Kingdom, and Cedric Chanu, 39, a French citizen, who are accused of placing orders for gold, silver, platinum or palladium futures contracts on the futures exchange owned by the CME Group. Edward Bases, 55, and John Pacilio, 53, both of Connecticut and based in New York City, were charged in a criminal complaint with commodities fraud.
Jiongsheng Zhao, 30, of Australia, was charged in a criminal complaint with wire fraud, commodities fraud, making false statements to the CME and spoofing in the e-Mini S&P 500 futures contract market on the Chicago Mercantile Exchange from 2012 thru 2016.
Similar charges were filed against two other men. Krishna Mohan, 33, of New York City, was charged in a criminal complaint in federal court in Texas in connection with activities while he worked at an unnamed proprietary trading firm in Chicago. Charges in Connecticut against Andre Flotron, 53, of Switzerland, were related to his role as a UBS precious metals trader.
On a call with reporters Monday, federal regulators vowed to aggressively pursue those who engage in spoofing, which they described as “an emerging fraud trend,” said Chris Hacker, deputy assistant director of the FBI’s criminal investigative division, which assisted with the cases.
crshropshire@chicagotribune.com
Twitter @corilyns
