NJ trader is the first to get prison time for ‘spoofing’

A former New Jersey trader convicted of gaming the futures market was sentenced to three years behind bars on Wednesday, marking the first time a person is going to prison for “spoofing.”

Michael Coscia, 54, of Rumson, was also sentenced to two years of post-prison probation. Prosecutors had recommended five to seven years in the slammer.

A Chicago federal jury convicted him in November of six counts of fraud and six counts of spoofing, which involves placing bogus bids for futures with no intention of actually buying.

While spoofing is controversial, it was only made a crime in 2010 as part of the Dodd-Frank financial reform law. It carries a maximum sentence of 10 years.

Prosecutors said Coscia made more than $1 million from the scheme, which resulted in losses for trading houses on the other side of his orders, including Citadel, a $25 billion powerhouse.

Prosecutors showed that Coscia placed big orders that he canceled more frequently than others who were trading at the same time.

Coscia, the owner of the New Jersey fund Panther Energy Partners, maintained that he always intended to make good on his orders.