The Commodity Futures Trading Commission (CFTC) amended its complaint against Logista Advisors LLC and its CEO, Andrew Harris Serotta.
The amended complaint was filed on November 28, 2023 in the Northern District of Illinois.
The amended complaint alleges that, from at least January 2020 through April 2020, Logista, acting through its chief merchant, principal and managing director, Serotta, engaged in manipulative and deceptive acts and practices in natural gas futures and crude oil futures markets, while placing orders and trading futures contracts in a registered entity.
By submitting hundreds of orders with the intention of canceling them prior to execution, the defendants intentionally or recklessly sent false signals of increased buy or sell interest with the intent to deceive other market participants into submitting higher bids or lower bids, allowing the defendants to execute orders in the opposite direction. side of their order book at bargain prices.
This was not the first time that Logista, an energy trading company in Houston, Texas, violated the Commodity Exchange Act 7 USC §§ 1–26 and the Commission’s regulations, 17 CFR units. 1–190 (2022).
On September 29, 2017, the CFTC initiated administrative proceedings against Logista, issuing an Order finding that, for several months in 2013 and 2014, Logista provided inadequate training, guidance and supervision to an employee who traded crude oil futures contracts.
These deficiencies resulted in the employee, when trading on a foreign futures exchange, repeatedly engaging in the disruptive trading practice commonly known as “spoofing”, i.e., offering or offering with the intent to invalidate the offer or his offer before execution. The Commission further found that after the exchange’s compliance department identified the trader’s misconduct, Logista failed to fulfill its obligation to oversee an appropriate investigation that would have enabled Logista to provide accurate answers to the exchange’s inquiries.
Among other things, the 2017 Order required Logista to cease and desist from diligently supervising the handling by its employees and officers of commodity interest accounts and other activities related to Logista’s activities as a Commission registrant, in violation of Rule 166.3 , 17 CFR § 166.3 (2022).
During the relevant period, the defendants illegally profited from the scheme involving forgery and fraudulent trading of hundreds of thousands of dollars, to the detriment of counterparties and other market participants.
Through this conduct, Defendants have engaged, are engaging, or will engage in fraudulent and manipulative acts and practices in violation of the Act and Regulations—specifically, Sections 4c(a)(5)(C) and 6(c)( 1 ) of the Act, 7 USC §§ 6c(a)(5)(C), 9(1) and Rule 180.1(a)(1) and (3), 17 CFR § 180.1(a)(1) , (3 ) (2022).
Logista also failed to provide adequate oversight to prevent Serotta from engaging in counterfeiting and manipulative and deceptive business practices. Through this conduct, the defendants have engaged in, are engaged in, or are about to engage in violations of Regulation 166.3, 17 CFR § 166.3 (2022), and the 2017 order for further oversight failures.
The Commission seeks civil monetary penalties and consequential relief, including but not limited to marketing and registration bans, disgorgement, pre- and post-judgment interest and any other relief the Court deems necessary and appropriate.
Unless restrained and enjoined by this Court, Defendants are likely to continue to engage in the acts and practices alleged in this Complaint and similar acts and practices.