Securities Regulation Daily Wrap Up, ENFORCEMENT—CFTC orders Colorado trader and Illinois firm to pay $200,000 for spoofing, (Sep 10, 2025)
Organizations Mentioned:Nasdaq
The CFTC fined a Colorado trader and an Illinois firm $200,000 and imposed a trading ban on the trader for spoofing in E-mini futures markets.
The CFTC sanctioned Colorado trader Brett Falloon and Illinois-based Flatiron Futures Traders LLC for spoofing in the E-mini S&P 500 and E-mini Nasdaq 100 futures markets. Under the settlement order, Falloon and Flatiron must jointly pay a $200,000 civil monetary penalty, while Falloon faces a 12-month trading ban. Both were also ordered to cease further violations of the Commodity Exchange Act’s spoofing prohibition (In the Matter of Falloon, CFTC Docket No. 25-07 (Sept. 9, 2025)).
According to the CFTC, Falloon engaged in spoofing between May and December 2022 by placing bids and offers with the intent to cancel them before execution. Falloon’s trading strategy involved placing legitimate orders he intended to execute on one side of the market, while simultaneously posting large spoof orders on the opposite side to mislead market participants. After his genuine orders were filled, he canceled the spoof orders.
The order details that Falloon’s spoofing was systematic, with his spoof orders often comprising a majority of the visible market depth. On average, the volume of his spoof orders outnumbered his genuine orders by a ratio of five to one. By using this strategy, Falloon misled other traders, causing them to cross the spread or post at the best offer, enabling him to fill his real orders faster, in greater size, or at better prices.
This case is CFTC Docket No. 25-07.
LitigationEnforcement: CFTCNews CommodityFutures Derivatives Enforcement ExchangesMarketRegulation FraudManipulation