The Department of Justice has filed charges against a high-frequency trader who abused the system for personal profit.
The Justice Department alleges that a trader named Michael Coscia used the high-tech trading platform at the commodities trading company he runs to place and then cancel dozens of large purchases in less than a second, tricking the electronic marketplaces that determine the commodities prices. Coscia’s alleged trading program allowed him to pocket about $1.6 million over a three month program, according to a press release detailing the charges.
As Bloomberg points out, this is the first time such a charge has been filed under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Prior to the passage of Dodd-Frank, the charges filed by the Justice Department today would not have been possible. The Wall Street reform bill defined high-speed spoofing as “bidding or offering with the intent to cancel the bid or offer before execution.”
Several weeks ago Attorney General Eric Holder announced that the Department of Justice was preparing charges against individuals at Wall Street firms. It’s not clear if this was among the cases Holder vaguely referenced, but it may be among them.
I’m sure I don’t need to remind you that Republicans were and are adamantly opposed to Wall Street reform.