Australian trader Jiongsheng Zhao pleads guilty to manipulating Chicago futures market, boosting prices with trades he cancelled milliseconds later
- In one case, Jiongsheng Zhao placed an order for futures contracts valued at nearly US$19 million then cancelled it 0.059 seconds later
- The ‘spoofing’ charge carries a maximum 10-year prison term
An Australian commodities trader has pleaded guilty in a US federal court in Chicago to manipulating market prices by placing orders in the millions of dollars, then cancelling them within milliseconds so that he could sell smaller orders at a profit.
Jiongsheng “Jim” Zhao pleaded guilty on Wednesday to one count of spoofing in a deal with prosecutors, who say that from 2012 to 2016, the 31-year-old executed trades on the Chicago Mercantile Exchange online from Sydney.
Spoofing carries a maximum 10-year prison term, but Zhao’s lawyer, Theodore Poulos, told US District Judge John Tharp during Wednesday’s hearing that he and prosecutors planned to recommend a one-year sentence.
With time served in Australia awaiting extradition to the US, that means Zhao could only serve a few more months behind bars.
Zhao is due to be sentenced July 19. In the meantime, he will be allowed to return to Australia.