7th Circuit upholds spoofing conviction despite Sullivan & Cromwell conflict

Signage is seen outside the Sullivan & Cromwell law firm in Manhattan, New York, United States on September 17, 2020. REUTERS / Andrew Kelly

• Michael Coscia was the first person convicted of spoofing
• Sullivan & Cromwell had no effect on the 2015 trial

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(Reuters) – The U.S. 7th Court of Appeals dismissed a former high-speed vendor’s challenge to his conviction on spoofing allegations, saying that while his law firm Sullivan & Cromwell had a conflict of interest in the case, it had no impact on 2015 Attempt.

The US Circuit Court judge Kenneth Ripple wrote for the panel that the defense of Michael Coscia by representing Sullivan & Cromwell to the Intercontinental Exchange (ICE), the operator of a commodities market where prosecutors said Coscia was fraudulent Has done business has not been affected.

A Coscia attorney and spokesman for the government and the law firm did not immediately respond to requests for comment on Monday.

Spoofing involves submitting offers to buy or sell for futures contracts with the intention of canceling them prior to execution. By creating an illusion of demand, the tactic can influence prices to improve the trader’s market positions.

Coscia, the owner of New Jersey-based Panther Energy Trading LLC, was the first person to be prosecuted under an anti-spoofing provision under the Dodd-Frank Act of 2010.

He spent around three years in prison and was released in 2019.

In 2017, the 7th District upheld Coscia’s conviction and rejected his arguments that the anti-spoofing statute was unconstitutional and that the evidence at the trial was insufficient to support his conviction. Ripple and US Circuit Court Judge Ilana Rovner were also on the panel that decided on the appeal.

Coscia then filed a civil rights lawsuit to overturn his conviction of the alleged Sullivan & Cromwell conflict and requested a retrial based on commercial data he received following his conviction.

US District Judge Harry Leinenweber ruled in 2019 that Coscia had failed to demonstrate that the conflict had adversely affected his trial. The judge also declined his offer to retrial based on more complete trade data he received from ICE.

U.S. Circuit Court judges Ripple, Rovner and Frank Easterbrook upheld these rulings on Monday, saying the difference between the data aggregated in the process and what Coscia has received since then is not material.

The court said attorney Kenneth Raisler and his firm’s representation of ICE “and failure to disclose such a conflict gives cause for concern that loyalties may be divided,” but said Coscia had failed to show that this was his defense have impaired.

Coscia had argued that Sullivan & Cromwell was ineffective because they failed to get the full ICE data, but the panel said the data did not change the outcome of the study.

The case is USA v Coscia, 7th Court of Appeal, No. 19-2010.

For Coscia: Terence Campbell from Cotsirilos, Tighe, Streicker, Poulos & Campbell

On behalf of the government: Georgia Alexakis of the US Attorney’s Office for the Northern District of Illinois.

Continue reading:

7th Circuit is looking to see if any conflicts between Sullivan and Cromwell have overshadowed the spoofing process

Jody Godoy

Jody Godoy reports on banking and securities law. Reach her at jody.godoy@thomsonreuters.com

source https://thedailytradingnews.com/7th-circuit-upholds-spoofing-conviction-despite-sullivan-cromwell-conflict/