CFTC’s Issuance of Foreign Boards of Trade Permits
Elise Fleischaker
The CFTC announced on October 31st, 2016 that they issued Orders of Registration to the following Foreign Boards of Trade (FBOT): Eurex CME Europe Limited ICE Futures Europe The London Metal Exchange London Stock Exchange We congratulate these exchanges on their newly acquired Orders of Registration. These Orders of Registration will allow FBOT members and other participants located in the U.S. direct access to the order entry and matching engine for these five exchanges. The CFTC issued these Orders in
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Accused U.K. flash-crash trader loses extradition fight, will appear in Chicago for trial
Elise Fleischaker
Becky Yerak Reporter, Chicago Tribune   Accused "flash crash" trader Navinder Singh Sarao lost his latest round to fight extradition and will be sent from the U.K. to Chicago to face federal charges that he helped trigger a 2010 tumble in stock markets. A U.K. judge on Friday refused Sarao's application to appeal his extradition, a court spokesman said. A grand jury in Chicago indicted Sarao in 2015, alleging manipulation on the Chicago Mercantile Exchange. The charges against Sarao include wire fraud,
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A $700 million lure for finance biz whistleblowers
Elise Fleischaker
—and hundreds are grabbing for it... Anyone brooding about illegal practices in the financial markets now has a $700 million incentive from the federal government to speak up. And Chicagoans are responding to the Securities and Exchange Commission and Commodity Futures Trading Commission call for whistleblowers, say lawyers who work with them. So are firms anxious about the tattling programs created in 2010 by the Dodd-Frank Wall Street Reform Act. Some 350 Illinois tipsters dialed up the SEC in the
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CFTC, Oystacher Said to Be in Spoofing Case Settlement Talks
Elise Fleischaker
As reported on Bloomberg by Matthew Leising and Janan Hanna The U.S. Commodity Futures Trading Commission is trying to settle its market-manipulation case against Igor Oystacher and his Chicago firm 3Red Trading LLC. Lawyers on Tuesday persuaded U.S. District Judge Amy St. Eve to allow two more weeks for those discussions, according to the people familiar with the matter who asked not to be named because they weren’t authorized to speak publicly. No agreement has been reached and the talks could still break
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Thompson Coburn: Was that trader really ‘spoofing’? Focus on the words, not the regulator claims
Elise Fleischaker
Kent Knickmeyer, Richard Reibman published and article worth reading taking a look at spoofing. They specifically try to answer the following question: Can trading pursuant to an algorithmic program properly be found to constitute “spoofing” in violation of CEA Section 4c(a)(5)(C): What constitutes “the intent to cancel the bid or offer before execution”? They focus specifically on understanding "The intent to cancel." Read the full article on JDSupra Business Advisor.   
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Chicago based FCM and its officers fined: Supervision & Risk Issues
Elise Fleischaker
CFTC Press Release PR7449-16 CFTC Orders Chicago-based Advantage Futures LLC, its CEO Joseph Guinan, and Former Chief Risk Officer William Steele Jointly to Pay a $1.5 Million Civil Monetary Penalty for Supervision, Risk Management Failures, and Making Inaccurate Statements in Required Filings with the CFTC Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Advantage Futures LLC (Advantage), a Chicago-based Futures Commission Merchant (FCM), for failing to diligently supervise
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Dodd-Frank Section 747 prohibiting Spoofing
Elise Fleischaker
Section 747 of the Dodd-Frank Act amends section 4c(a) of the CEA  (``Prohibited Transactions'') to add a new section entitled ``Disruptive Practices.'' New CEA section 4c(a)(5) makes it unlawful for any person to engage in any trading, practice, or conduct on or subject to the rules of a registered entity that--(A) violates bids or offers; (B) demonstrates intentional or reckless disregard for the orderly execution of transactions during the closing period; or (C) is, is of the character of, or is commonly known to the trade
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Momentum Ignition: Arson for Financial Markets
Elise Fleischaker
ESMA has defined momentum ignition as a case of prohibited market manipulation. ICE Canada considers this to be disruptive, and so does the CME Group. One UK government report stated that momentum ignition will “induce algorithms to compete with other algorithms, can push prices away from fundamental values.”* This leads us to the question - what exactly is momentum ignition? And how do we detect that is has occurred so that compliance teams can surveill for this prohibited activity? An
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DV Trading Selects Neurensic for Compliance and Surveillance Requirements
Elise Fleischaker
CHICAGO, August 15, 2016 -- Neurensic, a fintech artificial intelligence (AI) startup, today announced that its CORE™ product has been selected by DV Trading for its market surveillance and compliance capabilities. DV Trading is a Chicago-based principal trading firm with approximately 250 employees that has traded derivatives and securities for the past 10 years. “We are excited to further bridge the gap between professional trading and compliance, as the technology that powers sophisticated trading has long outclassed legacy compliance technology,”
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MarketsWiki Education Series in Chicago May 2016
Elise Fleischaker
Tayloe Draughon, the managing director of product design at Neurensic, talked about the applications for artificial intelligence and machine learning in the financial industry. All the new rules and regulations have created opportunities to design algorithms, for example, to prevent illegal “spoofing”.
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