John Patrick Gorman III, a U.S. dollar swaps trader and managing director of Nomura, who is a defendant in a lawsuit brought by the Commodity Futures Trading Commission (CFTC), has managed to overturn some of the earlier rulings in this case.

This becomes clear from an order signed by Judge Victor Marrero of the New York Southern District Court on August 11, 2022. The order concerns the trader motion for reconsideration of a ruling that nixed his motion to dismiss the CFTC case.

In light of recent Second Circuit opinions, the Court found that reconsideration is warranted to permit Gorman to file a full motion to dismiss. At the conclusion of the parties’ briefing on Gorman’s proposed motion, the Court will determine whether dismissal is warranted, and whether to modify the Court’s prior Decision and Order regarding the elements necessary to establish liability under CFTC Regulation 180.1(a)(1) and (3).

Let’s recall that, according to the CFTC complaint, on February 3, 2015, Gorman III, trading from Tokyo, Japan for a U.S. affiliate of Nomura, engaged in a scheme to deceive and to manipulate the price of U.S. dollar interest rate swap spreads published on a screen displaying prices from a swap execution facility broker firm (SEF Broker Firm) in the United States – JBIC. Gorman engaged in this scheme in order to benefit the bank in a separate interest rate swap transaction with a bond issuer, the CFTC says.

The trader argues that the CFTC’s Complaint is its latest salvo in a campaign to win judicial approval for a vast expansion of the law of market manipulation.