After software developer Jitesh Thakkar‘s criminal trial on “spoofing”-related charges ended in a mistrial two weeks ago, the Government determined it will not seek to retry the case. Thakkar was originally charged with conspiracy to commit spoofing and with two counts of spoofing arising out of his company’s development of software that enabled a
Can a software programmer be held criminally responsible for designing a program that a trader uses to “spoof” the commodity futures market? This is the question posed to the jury in U.S. v. Thakkar, 18-cr-36 (N.D. Ill.), which trial began this week in federal court. The case grew out of the manipulative trading activities of Navinder Sarao, a London-based commodities trader who “spoofed” (i.e., placed bids or offers with the intention of canceling them before execution) futures on the Chicago Mercantile Exchange (CME). Sarao’s activity allegedly contributed to the May 6, 2010, “Flash Crash” in which the Dow Jones Industrial Average dropped nearly 1,000 points within minutes. Sarao pleaded guilty to fraud and spoofing charges in November 2016.
Jittesh Thakkar, the software programmer currently on trial, was indicted in February 2018 on charges that he conspired with Sarao to commit spoofing and that he aided and abetted Sarao’s spoofing by developing a customized software program that Sarao used to execute manipulative trades. The indictment against Thakkar marks the first time the U.S. Department of Justice (DOJ) has prosecuted an individual other than a trader with a spoofing-based crime.