Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—Trader to pay $200K penalty to CFTC to settle spoofing charges, (May 7, 2026)

By Rebecca E. Hoffman, J.D.

He is also barred from commodities trading or associating with people or entities registered with or exempt from registration with the Commission, for one month.

The CFTC announced May 6 that a New York trader has settled CFTC charges of spoofing while trading treasury futures. The trader agreed to pay a civil money penalty and discontinue any commodities trading activity for a month (In the Matter of Sidney Lebental, CFTC Docket No. 26-01 (May 1, 2026)).

The CFTC determined that the respondent violated Commodity Exchange Act Section 4c(a)(5)(C), 7 U.S.C. § 6c(a)(5)(C), approximately 50 times between January and September of 2019. Section 4c(a)(5)(C) prohibits spoofing, defined by the statute as “bidding or offering with the intent to cancel the bid or offer before execution.” His method was to place orders for cash Treasuries, and then on the opposite side of the market, place orders for correlated Treasury futures contracts (usually the “Ultra Bond” futures contract). He would cancel the latter orders when the original orders were at least partially filled.

“In placing these Spoof Orders, [the respondent] intentionally or recklessly sent false signals of increased supply or demand to trick participants into executing against the Genuine Orders,” the CFTC said. The respondent’s intent when placing the “spoof orders” was to cancel them, the order emphasized.

The respondent agreed, without admitting or denying the charges, to pay the $200,000 penalty along with any post-judgment interest within 10 days. He also consented to cease and desist from violating Section 4c(a)(5)(C), and to refrain from trading or being involved in any transaction dealing with commodity interests, directly or indirectly, for 30 days.

The order is No. 26-01.

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