Two former Bank of America Corp. traders were convicted Wednesday of rigging precious-metals prices by using an aggressive tactic known as spoofing, the latest win for prosecutors in a yearslong effort to crack down on the conduct.
A federal jury found Edward Bases and John Pacilio guilty of wire fraud and conspiracy charges after a two-week criminal trial in Chicago. The proceeding was a test of prosecutors’ efforts to punish spoofing activity that predated a law defining the tactic and making it illegal.
Prosecutors argued that trading by Messrs. Bases and Pacilio on futures exchanges operated by CME Group Inc. was deceptive, allowing the government to charge the conduct as fraud. Lawyers for the defendants argued that their style of trading was allowed before the 2010 Dodd-Frank financial overhaul law prohibited spoofing.
Bank of America, which employed Mr. Bases until 2015 and Mr. Pacilio until 2011, agreed in 2019 to pay $25 million to settle criminal and civil investigations over its traders’ conduct.
(More to Come)
