CFTC seeks to block oil and gas trader

OREANDA-NEWS. November 12, 2015. The US Commodity Futures Trading Commission (CFTC) is trying to block the owner of US trading firm 3Red from buying and selling crude and natural gas futures until the agency's lawsuit against the trader has been resolved.

The CFTC in October accused 3Red and its owner, Igor Oystacher, of engaging in a banned practice known as "spoofing" to manipulate futures prices on four different exchanges. Regulators allege Oystacher between 2011-14 placed and quickly canceled large "spoof orders" to give the impression that market prices had changed.

The CFTC, in a request for a preliminary injunction filed yesterday, told a federal court in Illinois that Oystacher used that practice "in every market that the CFTC has reviewed" despite repeated sanctions. The agency said his repeated pattern of allegedly using spoofing demonstrates the need for a court to issue a preliminary injunction. The CFTC wants him banned from further trading in crude, natural gas and three other futures contracts until the lawsuit is resolved.

An attorney representing 3Red said the company was reviewing the CFTC's motion but had no further comment.

The CFTC last week won its first spoofing-related lawsuit against Panther Energy Trading after a jury found its head trader Michael Coscia guilty of spoofing charges. The agency accused Coscia of placing large spoof orders to entice market participants to change prices, then quickly flipping his position to make money on the other side of the trade. Sentencing for Coscia is scheduled for March 2016.