Ex-Deutsche Bank trader asks top court to quash spoofing conviction

An ex-Deutsche Bank precious-metals trader has asked the U.S. Supreme Court to overturn his conviction for manipulating gold and silver prices with fake "spoof" trade orders.

Bloomberg/Photographer: Bloomberg/Bloomber

James Vorley, who was based in London, was found guilty by a federal jury trial in Chicago in 2021 after they found that he made bogus trade orders between 2008 and 2014 to illegally influence metals prices. Cedric Chanu, his colleague at Deutsche, was also found guilty and will file a separate judicial review.

The prosecution of Vorley and Chanu was part of a U.S. crackdown on illegal spoofing cases since the global market "flash crash" in 2010. Spoofing is when a trader enters buy or sell orders and then cancels them before they are executed, creating false market indicators which the spoofer then exploits for profit by taking the opposite position.

While canceling orders isn't prohibited, the 2010 Dodd-Frank Act made it illegal to place orders with no intention of executing them.

Vorley, who was sentenced to a year in prison, asked the Supreme Court to quash his conviction arguing that the orders were not fraudulent and the case "threatens to criminalize virtually any conduct that a prosecutor deems deceptive or dishonest," according to the filing.

"Under the government's theory, a trader who secretly hopes to cancel a bid commits criminal fraud against other traders, even if the trader is willing and able to honor every bid or offer," his lawyers said in the filing.

Vorley also claims that prosecutors violated the Speedy Trial Act, which sets time limits for the various stages of criminal prosecutions. A lower court had previously rejected both Vorley and Chanu's appeals.

A spokesperson for Deutsche Bank and lawyers for Vorley didn't immediately respond to a request for comment.