A couple of former Wall Street traders are going to prison for spoofing activity in derivatives markets.
According to the U.S. Department of Justice (DoJ), Edward Bases, 61, a former senior trader at Deutsche Bank and Bank of America, and John Pacilio, 59, a senior trader at BofA and Morgan Stanley in New York, were each sentenced to one year, plus a day, in prison after being convicted of wire fraud and conspiracy.
The convictions stem from their involvement in a market manipulation scheme that involved placing large “spoof” orders in precious metals futures in order to move those prices to benefit their trading positions.
In doing so, they defrauded other traders on the Commodity Exchange Inc. and the New York Mercantile Exchange Inc., the DoJ said.
Additionally, U.S. authorities alleged that Bases and Pacilio also taught other traders how to engage in spoofing.
Following a trial, they were convicted in 2021 of multiple counts of wire fraud, conspiracy to commit wire fraud affecting a financial institution, and Pacilio was convicted of commodities fraud, the DoJ said.