Jitesh Thakkar, the Indian American founder of Loop-based Edge Financial Technologies, was arrested in Illinois on Monday, Jan. 29 and charged with committing commodities fraud through so-called spoofing trades by federal authorities, according to a Chicago Tribune report.
The Chicago Tribune reports that in a criminal complaint, Thakkar, 41, of Naperville, Illinois, 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 only after bids were placed on the other side of the market.
The Commodity Futures Trading Commission also filed a lawsuit in federal court in Chicago against Thakkar.
According to the Chicago Tribune report, regulators and the Justice Department also said on Monday that they have settled the spoofing allegations against UBS, HSBC and Deutsche Bank.
While Deutsche Bank will pay $30 million in penalty, UBS will pay $15 million in penalty and HSBC will pay $1.6 million in penalty.
The Chicago Tribune also reported that criminal charges have been filed in federal court in Chicago against many others who were involved in the scheme including 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, who were charged in a criminal complaint with commodities fraud and Jiongsheng Zhao, 30, of Australia, who 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 to 2016.
Indian American Krishna Mohan, 33, of New York City, was also charged in a criminal complaint in Texas in connection with activities while he worked at an unnamed proprietary trading firm in Chicago and Andre Flotron, 53, of Switzerland, was charged in Connecticut, relating to his role as a UBS precious metals trader.