Jersey trader spoofed for profits: feds

The spoof's on him.

A 52-year-old New Jersey commodities trader was indicted Thursday and charged with pocketing $1.6 million in illegal profits by placing fake orders.

The illegal practice, known as spoofing, has traders, via computer programs, place orders to buy a stock or commodity and then, within milliseconds, cancel the order.

The fake order would drive the price of the stock of commodity higher. With the price fraudulently inflated, the trader would unload his position for a profit.

Michael Coscia, a high-frequency trader in Rumson, NJ, devised such a program to place giant orders for gold and soybean oil futures, according to the six-count indictment handed up by a Chicago grand jury.

The trader faces up to 25 years in prison if he is convicted.

Coscia, the former head of Panther Energy Trading, last year settled civil charges brought by the Commodity Futures Trading Commission over the same spoofing maneuvers.

He and his firm paid $2.1 million to settle the charges without admitting or denying guilt.

Coscia is the first person indicted for spoofing under commodities laws that were toughened up in 2010.

The charges come about five months after Terrence Duffy, president of the commodity exchange CME Group, said that high-frequency trading isn't a problem in the futures market.

"Spoofing has always been banned on our market," said Michael Shore, a CME spokesman.

"I think it would be best for now to not comment," Richard Reibman, Coscia's lawyer, told The Post.

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