@PocketChange: see the CME rule on wash sales. These trades clearly meet this definition are therefore prohibited under exchange rules and subject to prosecution by the CFTC. Here's a link: http://www.cmegroup.com/rulebook/files/CME_Group_RA0913-5.pdf
Are you arguing just for the sake of argument? This is how it was done. The scammer went into a deferred, illiquid back month (actually they traded a slew of back months going as far as 3/2015) where the Velocity account was able to enter a "high ball" offer. The OEC account then bought the Velocity offer. I presume each account either offset in the front month, creating a spread or traded against each other again, only this time on the "bid." Globex being an "open and transparent regulated exchange" has absolutely nothing to do with it. Just because it's more difficult doing this on Globex, as opposed to a phantom OTC transaction-is of no material impact to the charge of "pre-arranged." Traders have washed losses (for tax reasons) in back month futures and illiquid ITM option strikes, for decades. And how is this the CME's fault? You sound illogical. For starters, you can't have a pre-arranged trade without a trade actually occurring. What's the CME supposed to do? On the fly, decide to "shut down" Ruble futures? Without an investigation? Without knowing, if in fact, these trades were prearranged? As far as position limits: There's no evidence that these trades resulted in a "net" 19,000 contracts being "open" and as you know, or should know, "limits" are "unlimited" during the session itself.
Obviously they worked the systems... I'm not arguing that point. I don't believe the two accounts were commonly owned or controlled. No doubt they had some sort of arrangement based on capturing 50% of the order flow... The paper trail would provide a preponderance of evidence. Injunctive relief is a rare remedy especially when an award for money damages can make you whole. My arguments leans more in the area of due process.. innocent until proven guilty. OEC was on the hook and took action to protect their interest. My concern is for the alleged unidentified "confederate" whose velocity account was seized. This party will now sign or say anything they want him to say to get out of litigation.
@PocketChange: The CTFC complaint alleges (and the subsequent judicial order appears to confirm) common ownership of the two accounts by a single named individual. It even mentions that a single IP address was traced as the source for near simultaneous order entry into both accounts: http://cftc.gov/ucm/groups/public/@...legalpleading/enfyunusovcomplaint06112010.pdf
He's not worth arguing with. Read his post "Based on this same logic..." if you need to be convinced.
Wow! OK i get it now same guy... The original courthouse link stated an unnamed accomplice. " Upon discovering the software error, Yunusov and an unnamed accomplice made more than 19,000 trades in a single day - June 4 - booking the losses on Yunusov's account, while hiding his gains in his confederate's account, according to the complaint."
Reading the complaint this guy had to have quite a setup. OEC API, X-Trader API. 80,000 undetected rt's across approx 15 different contracts in 12 hours. HFT trading algo pushing 2 orders per second from a Russian IP address. A High Tech Virtual Bank Robbery from abroad. Fascinating read.