07 Nov 2018: Two Indian-Americans plead guilty to $60mn commodities fraud, spoofing conspiracy
Two Indian-Americans have pleaded guilty to the charges of $60 million commodities fraud and spoofing conspiracy in New York and Chicago, federal prosecutors said Tuesday.
Krishna Mohan, 33, of New York, pleaded guilty to one count while Kamaldeep Gandhi, 36, of Chicago, to two counts of conspiracy to engage in wire fraud, commodities fraud and spoofing, they said.
Details: Gandhi, Mohan admitted they conspired to mislead markets in 2012-14
Gandhi and Mohan admitted that from Mar'12-Mar'14, they conspired with Yuchun "Bruce" Mao and others at the first firm (Trading Firm A) to mislead markets for E-Mini S&P 500 and E-Mini NASDAQ 100 futures contracts traded on the Chicago Mercantile Exchange (CME), the Department of Justice said.
They also misled markets for E-Mini Dow futures contracts traded on the Chicago Board of Trade (CBOT),
Fraud: Duo and co-conspirators placed thousands of spoof orders
Mohan and Gandhi had further admitted that they and their co-conspirators placed thousands of orders that they did not intend to execute, or "spoof orders".
They did so to obtain executions of other orders, or "primary orders", at better prices, quantities and/or times than otherwise possible, to the benefit of the co-conspirators and Trading Firm A, the Department of Justice said.
Losses: Scheme resulted in market losses of over $60mn, admits duo
Gandhi and Mohan admitted that the US has calculated that the scheme resulted in market losses of over $60 million, the Department said.
In addition, Gandhi admitted that, from May 2014 through October 2014, while employed at the second firm (Trading Firm B), he conspired with others to mislead the markets for E-Mini S&P 500 futures contracts traded on the CME.
The scheme: Sentencing scheduled in Texas court in February next year
Gandhi agreed to place, and himself placed, hundreds of spoof orders for E-Mini S&P 500 futures contracts to create the false and misleading appearance of increased supply or demand.
He admitted the US calculated that the scheme resulted in market losses of over $1.3 million.
Sentencing for Mohan and Gandhi is scheduled in a Texas court on February 28 and February 22, 2019, respectively.