Ex-Citi traders fined $550k for spoofing US treasury future markets

Fines follow Citi’s $25 million penalty for spoofing US treasury futures markets in January this year.  

Two former traders at Citigroup in the US have been fined a combined $550,000 and a six-month ban from trading for spoofing treasury futures markets.

Stephen Gola and Jonathan Brims engaged in spoofing activity - bidding or offering with the intent to cancel before execution - more than 1,000 times in various CME US treasury futures products.

The US Commodity Futures Trading Commission (CFTC) fined Gola $350,000 and Brims $200,000 for the misconduct.

The bids were placed after another smaller bid or offer was placed on the opposite side of the same or correlated futures or cash market, the CFTC said.

Both traders placed their spoofing orders to “create or exacerbate an imbalance in the order book” and “cancelled their spoofing orders after either the smaller resting orders had been filled or the traders believed that the spoofing orders were at too great a risk of being executed,” the US authority added.

The fine to the former traders follows Citi’s $25 million penalty by the CFTC in January for failing to supervise its traders who were spoofing US treasury futures.

The regulator found Citi had failed to provide sufficient training about spoofing to traders on its US treasury and US swaps desks.

“In fact, for most of the traders through which Citigroup spoofed, the only communication they received about spoofing before or during the relevant period consisted of a single compliance alert containing the Act’s anti-spoofing language,” the CFTC said at the time.