THE FINANCIAL Conduct Authority (FCA) yesterday fined a US-based high frequency trader £597,993 for breaking trading rules on London’s commodity futures market.
Michael Coscia, a 51-year-old oil trader based in New Jersey, was fined for writing a computer algorithm to manipulate prices on the UK’s ICE Futures Europe exchange.
The programme allowed Coscia to flood the exchange with thousands of false orders for commodity futures, giving the impression of rising demand.
These orders would be cancelled but the artificial price movements allowed Coscia to bank $279,920 from the changing prices. Coscia practised the strategy for six weeks between early September and mid-October in 2011. “Mr Coscia was cheating the market and other participants,” the FCA said.