First trade convicted of spoofing gets 3 years in prison
Michael Coscia was convicted of spoofing and will spend 3 years in federal prison followed by 2 years of supervised release. He faced a maximum sentence of 10 years.
The guilty verdict was handed down late last year after a jury deliberated for just an hour.
Bloomberg reported at the time that the case was based on just six trades that netted him $1070.
Prosecutors focused on six transactions, all from 2011, in the gold, euro, soybean meal, soybean oil, British pound, and copper futures markets. In total, these trades resulted in a profit of $1,070, according to the testimony. Prosecutors said Coscia conducted thousands of such trades.
His trading showed that he would first place a small order and then large orders on the other side of the market that were subsequently canceled after he executed smaller trades, Federal Bureau of Investigation Special Agent Brent Potter testified.
Jeremiah Park, a computer programmer who worked for Panther Energy, created trading algorithms under Coscia's direction that included "quote" orders designed to "pump market," according to Park's notes and testimony. The quote orders were to stimulate the market to get a reaction, Park said.
Steven Peikin, one of Coscia's lawyers, argued that high-frequency traders routinely canceled orders. He told the jury that Coscia's trading strategy was unique, but not illegal.
Six trades...
