U.S. authorities have charged a high frequency trader for allegedly manipulating commodities futures prices in the first federal prosecution brought under an anti-spoofing provision that was created by the post-crisis regulatory reform in the U.S., Dodd-Frank.

U.S. Attorney for the Northern District of Illinois, Zachary Fardon, announced that Michael Coscia, 52, of Rumson, N.J., a registered commodities trader since 1988, was charged with six counts of commodities fraud and six counts of “spoofing” in a 12-count indictment returned yesterday by a federal grand jury. Coscia, who was the manager and sole owner of the former Panther Energy Trading LLC, will be arraigned on a date to be determined in U.S. District Court in Chicago. The allegations against him have not been proven.

According to the indictment, Coscia designed two computer programs he allegedly used in 17 different CME Group markets and three different markets on the London-based ICE Futures Europe exchange, including gold, soybean meal, soybean oil, high-grade copper, Euro FX and Pounds FX currency futures. It says that in August 2011, Coscia began using an HFT strategy in which he entered large-volume orders that he intended to immediately cancel before they could filled by other traders, “to create a false impression regarding the number of contracts available in the market, and to fraudulently induce other market participants to react to the deceptive market information he created.”

This enabled him to trade at favourable prices, and then, it says, he allegedly repeated this strategy in the opposite direction to immediately generate a profit. As a result, it’s alleged that illegally profited by approximately $1.6 million over three months.

“Traders and investors deserve a level playing field, and when the field is tilted by market manipulators, regardless of their speed or sophistication, we will prosecute criminal violations to help ensure fairness and restore market integrity,” Fardon said. “This case reflects the reasons why, earlier this year, we established a Securities and Commodities Fraud Section, which is dedicated to protecting markets and preserving investors’ confidence,” he added.