Advertisement

Our coronavirus coverage is free for the first 24 hours. Find the latest information at tampabay.com/coronavirus. Please consider subscribing or donating.

  1. Business

Feds: Trader made $1.5 million by manipulating prices

CHICAGO — A high-frequency trader in New Jersey is facing charges for allegedly manipulating commodities prices by issuing false signals to the market and then profiting off them while using software that executes trades in milliseconds, federal prosecutors in Chicago announced Thursday.

Michael Coscia, 52, of Rumson, N.J., is accusing of making about $1.5 million by illegally placing orders through the Chicago-based CME Group, the world's largest operator of futures exchanges, and European futures markets in 2011. The case is the first of its kind under major changes to federal commodities law in 2010, according to the U.S. Attorney's Office in Chicago.

Brokerage firms use high-frequency trading to get a jump on their competitors. Powerful computers analyze market information and then execute buy and sell orders for stocks within a fraction of a second. The practice has come under increasing scrutiny, with the FBI confirming earlier this year that it had been investigating such firms.

Coscia faces six counts each of commodities fraud and "spoofing," which refers to signaling that an order is being placed without intending to follow through. If convicted, he could be sentenced to decades in prison.

His attorney, Richard T. Reibman, said he is "discussing the matter" with prosecutors.

YOU MIGHT ALSO LIKE

Advertisement
Advertisement