Citigroup Global Markets will pay the CFTC $25 million to settle charges it engaged in spoofing by placing orders to trade U.S. Treasury futures and then canceling them before execution.
Five Citigroup traders engaged in spoofing — which intends to manipulate the market by artificially raising or lowing prices to enhance a future trade — over 18 months ended Dec. 31, 2012, the Commodity Futures Trading Commission said in a news release Thursday.
Spoofing is outlawed under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The Citigroup traders “engaged in spoofing more than 2,500 times in various Chicago Mercantile Exchange U.S. Treasury futures products,” the CFTC said in the news release. Also, at least once, some of the traders coordinated with each other to implement the spoofing strategy, the CFTC said.
Citigroup said in a statement, “We are pleased to have resolved this matter.” It didn’t comment further.