A federal jury on Wednesday acquitted a former trader for the Swiss bank UBS of charges related to market manipulation, dealing a blow to a Justice Department effort to crack down on a Wall Street practice known as “spoofing.”
Prosecutors accused former trader Andre Flotron of trying to move market prices for precious metals by making offers on electronic trading systems to buy or sell gold, silver and other financial products and then quickly deleting those offers before anyone could accept them.
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But after only a few hours of deliberation, a jury in U.S. District Court in Connecticut rejected their theory, according to Flotron’s lawyer Marc L. Mukasey.
Flotron’s acquittal could spell trouble for similar cases brought by the U.S. government. In January, federal prosecutors filed criminal charges against seven other people for spoofing, among the first criminal charges brought for suspected financial crimes during the Trump administration. The Commodity Futures Trading Commission simultaneously brought civil cases against a number of the former traders, including Flotron. The traders’ behavior, a Justice Department official said at the time, reflected “a systemic problem.”
The Connecticut jury decided otherwise.
“It’s a huge setback for the government,” Mukasey said. “We basically smacked them in the face.”
Mukasey said he planned to ask the trading commission to dismiss its civil case against Flotron.
“While we are disappointed in the outcome, we respect the jury’s verdict,” a Justice Department spokeswoman said Wednesday.
A UBS spokseman declined to comment. A spokeswoman for the commission did not immediately respond to requests for comment.