Former Deutsche Bank traders make another push for new trial in spoofing case
Former Deutsche Bank traders James Vorley and Cedric Chanu, convicted of spoofing the precious metals futures market, have made another push for a new trial. On December 7, 2020, Vorley and Chanu filed a motion for a new trial with the Illinois Northern District Court.
As FX News Group has reported, Vorley and Chanu indicated back in October that they would seek a new trial. Their motion submitted on Monday, adds to the push for challenging the traders’ conviction. This time, the defendants refer to a spreadsheet containing alleged “spoofing sequences” – a document that Vorley and Chanu see as exculpatory evidence.
The spreadsheet contains a list of 5,902 alleged “spoofing sequences”. It was first disclosed to the defense on November 24, 2020. The spreadsheet purports to identify all trading in the gold and silver futures markets by Vorley, Chanu, and Liew between March 2008 and July 2013 that the prosecution and its expert, Professor Kumar Venkataraman, consider to be part of the same course of conduct or common scheme or plan as the offenses of conviction.
While the prosecution intends the spreadsheet to demonstrate the extent of the alleged scheme to defraud for purposes of sentencing, according to the defense, the spreadsheet in fact undermines the prosecution’s case. The defendants claim that the spreadsheet directly contradicts claims the prosecution made the centerpiece of its closing and rebuttal arguments.
In particular, Professor Venkataraman’s list of “spoofing sequences” does not include many of the alleged instances of spoofing that the prosecution proffered to the jury at trial. Of the 61 “Episodes” depicted in “Government Exhibit 1” at trial, 13 of them (nearly 25%) do not appear on the spreadsheet. And, contrary to the prosecution’s arguments at trial that spoofing continued unabated even after September 28, 2012, when Deutsche Bank first alerted Mr. Vorley and Mr. Chanu to the new Dodd-Frank anti-spoofing rule, the spreadsheet shows almost no instances of alleged spoofing after that date.
The defendants note that the jury struggled to convict the defendants, sending multiple deadlock notes and acquitting them on the conspiracy count and many of the substantive counts.
According to Vorley and Chanu,
“Had the jurors been made aware that Professor Venkataraman’s own list of “spoofing sequences” contradicted the prosecution’s summary charts and its arguments about fraudulent intent based on the trading after September 28, 2012, Mr. Vorley and Mr. Chanu would likely have been acquitted on the remaining counts”.
The recent disclosure of the “spoofing sequences” spreadsheet is seen as yet another reason to order a new trial in the interests of justice, the defendants conclude.
Let’s recall that James Vorley and Cedric Chanu were tried on a charge of conspiracy to commit wire fraud “from at least in or around March 2008 through at least in or around July 2013,” as well as 17 substantive counts of wire fraud. The charges were based on allegations of “spoofing,” or placing orders with the intent to cancel them before execution, as that term was defined in Section 747 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.