High-frequency oil trader fined for market abuse
The U.K. Financial Conduct Authority fined U.S.-based oil trader
Michael Coscia $903,176 for deliberately manipulating commodities
markets, marking the first time the FCA has taken action against a
high-frequency trader. Coscia used a program he designed to engage in
"layering," an abusive trading strategy, between Sept. 6 and Oct. 18,
2011. He placed thousands of false orders for Brent Crude, Gas Oil and
Western Texas Intermediate futures from the U.S. on the ICE Futures
Europe exchange in the U.K., and made a profit of $279,920 during the
six-week period, at the expense of other market participants. Coscia
would have been fined just over $1.15 million, but received a 30%
discount by agreeing settlement under the FCA's executive settlement
procedures.
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