CFTC files charges against Texas company and main dealer for spoofing and involvement in manipulative and fraudulent scheme and violating a previous CFTC order

Washington, D.C — The Commodity Futures Trading Commission today filed a civil complaint in the U.S. District Court for the Northern District of Illinois against Logista Advisors LLC and Andrew Serotta, accusing them of spoofing, manipulative and fraudulent activities, lack of oversight and violation of a previous CFTC order.

The program included crude oil and natural gas futures contracts – specifically calendar spread contracts – traded on CME and ICE Futures Europe. Serotta is the founder, chief executive officer, principal trader and registered affiliate of Logista, a registered commodity pool operator and commodity trading consultant.

In the lawsuit, the CFTC is seeking civil penalties, restitution, confiscation of ill-gotten gains, registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC rules alleged.

“Six years ago, Logista accepted the issuance of a CFTC order against the company for regulatory violations related to spoofing by an employee. Here we are again. As claimed, Logista and its client engaged in further spoofing, manipulative and fraudulent behavior. The CFTC will continue to vigorously pursue such behavior — particularly in the case of repeat offenders,” said Chief of Law Enforcement Ian McGinley.

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The complaint alleges that from around January 2020 to April 2020, Serotta falsified (made bids or offers with the intention of canceling the offer before it was executed). According to the complaint, he would place hundreds of large orders for crude oil and natural gas futures – calendar spreads in particular – he intended to cancel before execution (fake orders) while at the same time placing orders on the opposite side of the same futures markets (real orders) who would benefit from market participants’ reactions to his fake orders.

By placing the fake orders, Serotta allegedly misled other traders about supply and demand and misled market participants about the likely direction of the commodity price, making Serotta’s genuine orders more attractive to market participants and allowing Serotta to fill its genuine orders in larger quantities and at better rates Prices than without the fake orders. The complaint also alleges that by doing so, Serotta and Logista failed to carefully monitor the fund’s trading and violated a 2017 CFTC order finding a regulatory failure stemming from previous spoofing incidents at Logista . [See CFTC Press Release No. 7623-17]

The CFTC thanks the CME Group for its assistance in this matter.

The law enforcement officials responsible for this action are Meredith Borner, Katherine Paulson, Brandon Wozniak, Christopher Giglio, Patryk J. Chudy, Lenel Hickson Jr., and Manal M. Sultan, and former associates David Newman, Candice Aloisi, and Gates Hurand. The Enforcement Department Spoofing Task Force also helped in this matter.