IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

COMMODITY FUTURES TRADING ) 

COMMISSION, ) 

 ) 

 Plaintiff, ) 

 ) 

v. ) Case No. 1:18-cv-00619 

 ) 

JITESH THAKKAR AND ) 

EDGE FINANCIAL TECHNOLOGIES, INC., ) 

 ) JURY TRIAL DEMANDED

 Defendants. ) 

__________________________________________) 

COMPLAINT FOR INJUNCTIVE RELIEF, CIVIL MONETARY PENALTIES, AND 

OTHER EQUITABLE RELIEF 

 Plaintiff Commodity Futures Trading Commission (“CFTC”) alleges as follows: 

I. SUMMARY 

1. From at least January 30, 2013 through October 30, 2013, Trader A engaged in 

“spoofing” (bidding or offering with the intent to cancel the bid or offer before execution), and 

employed a manipulative and deceptive scheme, involving the E-mini S&P 500 futures near 

month contract (“E-mini S&P”) listed on the Chicago Mercantile Exchange, Inc. (“CME”). As 

part of this scheme, Trader A used a custom trading software application that contained a 

function called “Back of Book.” This Back-of-Book function helped Trader A place orders that 

he intended to cancel before execution (“Spoof Orders”) by minimizing the chance that these 

Spoof Orders would result in executed trades before Trader A could cancel them. 

2. Defendant Jitesh Thakkar (“Thakkar”), a computer programmer, and his 

company, Edge Financial Technologies, Inc. (“Edge”), designed and developed the custom 

trading software application for Trader A, including the Back-of-Book function beginning in fall 

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of 2011 and continuing through 2015 (the “Relevant Period”). Thakkar and Edge designed the 

Back-of-Book function with two features that were designed to help Trader A place Spoof 

Orders. First, the Back-of-Book function continually modified Trader A’s Spoof Orders so that 

these Spoof Orders remained at the back of the order queue at each price level on the CME 

Globex trading system (“Globex”), where they were less likely to be executed. Second, the 

Back-of-Book function automatically cancelled Trader A’s entire Spoof Order as soon as any 

portion of his Spoof Order was hit or lifted by another market participant. Using the Back-ofBook function, Trader A was able to place large Spoof Orders, often at or near the best bid or 

offer, that injected false information about supply and demand for the E-mini S&P and tricked 

other market participants into trading based on Trader A’s spoofing. 

3. When Thakkar and Edge designed the Back-of-Book function for Trader A, they 

understood that Trader A would use the Back-of-Book function to engage in spoofing and inject 

false information into the market about supply and demand for the E-mini S&P. 

4. By designing the Back-of-Book function with the intent to help Trader A engage 

in spoofing, Thakkar and Edge aided and abetted Trader A’s spoofing and his manipulative and 

deceptive scheme. Thakkar and Edge are thus responsible as if they were principals under 

Section 13(a) of the Commodity Exchange Act (“Act”), 7 U.S.C. § 13c(a) (2012), for Trader A’s 

violations of Sections 4c(a)(5)(C) and 6(c)(1) of the Act, 7 U.S.C. §§ 6c(a), 9(1), (3) (2012), and 

Commission Regulation (“Regulation”)180.1(a)(1) and (3), 17 C.F.R. § 180.1(a)(1), (3) (2017). 

5. The CFTC brings this action pursuant to Section 6c(a) of the Act, 7 U.S.C. § 13a1(a) (2012), to enjoin Thakkar’s and Edge’s unlawful acts and practices and to compel their 

compliance with the Act and Regulation. In addition, the CFTC seeks civil monetary penalties 

and such other equitable relief as this Court deems necessary or appropriate. 

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II. JURISDICTION AND VENUE 

6. This Court has jurisdiction over this action under 28 U.S.C. § 1331 (2012) 

(federal question jurisdiction) and 28 U.S.C. § 1345 (2012), which provides that district courts 

have original jurisdiction over civil actions commenced by the United States or by any agency 

expressly authorized to sue by Act of Congress. Section 6c(a) of the Act, 7 U.S.C. § 13a-1(a) 

(2012), authorizes the CFTC to seek injunctive relief in any proper district court of the United 

States against any person whenever it shall appear to the CFTC that such person has engaged, is 

engaging, or is about to engage in any act or practice constituting a violation of any provision of 

the Act or any rule, regulation, or order thereunder. 

7. Venue properly lies in this Court pursuant to Section 6c(c) of the Act, 7 U.S.C. 

§ 13a-1(e) (2012), because Thakkar and Edge reside in this District, transact business in this 

District, and have engaged in the acts and practices that violate the Act within this District. 

III. PARTIES 

8. Plaintiff Commodity Futures Trading Commission is the independent federal 

regulatory agency charged by Congress with the administration and enforcement of the Act and 

the rules, regulations, and orders thereunder. The CFTC is headquartered at Three Lafayette 

Centre, 1155 21st Street NW, Washington, DC 20581.

9. Defendant Jitesh Thakkar is a computer programmer who resides in Illinois and 

is the founder and president of Edge. Thakkar describes himself as Edge’s Chief Architect. 

Thakkar has over eighteen years of experience in designing and developing custom trading 

software applications for the trading industry, including algorithmic trading systems, custom 

order types for electronic trading, and electronic trading regulatory compliance systems. 

Thakkar conducts his business developing electronic trading software and tools through Edge. 

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Thakkar served on the CFTC’s Technology Advisory Committee’s subcommittee on High 

Frequency Trading from 2012 to 2014. Thakkar has never been registered with the CFTC.

10. Defendant Edge Financial Technologies, Inc. is an Illinois corporation that 

Thakkar founded in 2007. Thakkar is the president, secretary, and registered agent of Edge. 

Edge employs up to four software developers who help design and develop electronic trading 

software and tools at Thakkar’s direction and supervision. Edge has never been registered with 

the CFTC.

IV. FACTS 

A. The E-mini S&P Market 

11. The E-mini S&P is traded on CME, a registered entity. Trading in the E-mini 

S&P is conducted electronically via Globex. On Globex, traders have the ability to enter, 

modify, and cancel orders in a matter of milliseconds through a computer portal that accesses the 

Globex platform. 

12. An “order,” in the context of electronic exchange trading, is a request submitted 

to an exchange to buy (“bid”) or sell (“offer” or “ask”) a certain number of a specified futures 

contract. An order is for one or more contracts. Contracts may also be called “lots,” among 

other things. When an order to “buy” or “sell” futures contracts is placed on Globex, the order 

becomes part of the exchange’s order book. When one or more contracts in an order are bought 

or sold, the result is an executed trade. A buy order or bid that results in an executed trade is said 

to be “hit.” A sell order or offer that results in an executed trade is said to be “lifted.” 

13. The order book displays the total order volume at ten price levels on both the buy 

and sell sides of the market to all traders. The first-bid, or best-bid, level in the order book is the 

highest price at which someone is willing to buy. The first-offer, or best-offer, level in the order 

book is the lowest price at which someone is willing to sell. Globex functions such that all of the 

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orders at the best bid or best offer price level must be traded (“hit” or “lifted”) before any orders 

at the next available best bid or offer price can be traded. 

14. Traders can view the aggregate number of contracts being bid or offered at each 

of the ten price levels on the buy or sell side of the market, but it is typically not possible for 

market participants to identify individual orders within the order book. This combined bid and 

offer information is often referred to as the visible order book and represents the visible market 

depth. Traders often consider information in the order book when making trading decisions. 

15. For the E-Mini S&P, Globex utilizes a “first in, first out” matching system for 

determining which orders within a given price level are matched, or executed against, another 

order. This matching system places orders at the same price level in a queue, arranged from first 

received to last received, meaning orders later in the queue are less likely to result in executed 

trades. During the Relevant Period, the Globex “first in, first out” matching system dictated that 

if the quantity of an order was increased (but not if it was decreased) that order would be moved 

to the back of the queue at that price level, as if it were an entirely new order. 

B. At Trader A’s Request, Thakkar and Edge Designed and Developed the 

Back-of-Book Function To Help Trader A Engage in Spoofing 

16. Thakkar and Edge designed and developed the Back-of-Book function to exploit 

the Globex matching system and help Trader A place Spoof Orders in the E-mini S&P. At 

Trader A’s request, Thakkar and Edge designed the Back-of-Book function with two features. 

First, the Back-of-Book function, when enabled, automatically and continuously modified Trader 

A’s order at a particular price level down and then up by one lot whenever a certain number of 

contracts were placed at the same price level after Trader A’s Spoof Order entered the market. 

Each time the function automatically modified Trader A’s order up by one lot, Trader A’s order 

was moved by the Globex matching system to the back of the queue behind the orders of other 

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market participants at that price level, where Trader A’s orders were less likely to be executed. 

Second, the Back-of-Book function, when enabled, immediately and automatically cancelled 

Trader A’s order at a particular price level as soon as any portion of his order was hit or lifted by 

another market participant. These features of the Back-of-Book function enabled Trader A to 

place and leave large orders in the E-mini S&P at various price levels, including at or near the 

best bid or offer, that appeared to other market participants to be genuine orders, while 

minimizing the risk that these large orders would be hit or lifted before Trader A could cancel 

them. This allowed Trader A to send false signals of supply and demand for the E-mini S&P and 

induce other market participants to react to these false signals. 

17. Thakkar and Edge began designing and developing a custom trading software 

application for Trader A that included the Back-of-Book function in October 2011 after Trader A 

reached out to Thakkar for help. Beginning in October 2011, Thakkar and Trader A 

communicated by phone, emails, and web meetings to discuss Trader A’s specific requirements 

for the application, including the Back-of-Book function. In these communications, Trader A 

was impressed by Thakkar’s and Edge’s experience with programming trading software 

applications. 

18. Beginning with an email on October 12, 2011 and in subsequent communications, 

Trader A asked Thakkar to design and develop within the custom trading software application 

several custom order types he could use to place orders to buy and sell the E-mini S&P. These 

order types included “Join” and “Join Side” orders. Trader A explained to Thakkar that the Join 

order type should automatically place either a bid or an offer order for the specified quantity 

whenever either the price level that had been the best offer became the best bid or the price level 

that had been the best bid became the best offer. As Trader A described to Thakkar “So if I 

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placed a 300 lot JOIN on the bid at 51 and it is trading 53-54. If either the 53 Bid or the 54 Offer 

is traded out then my 300 will appear at the same time at 51.” 

19. Trader A explained to Thakkar that the Join Side order type should automatically 

place a bid if the price level that had been the best offer became the best bid, and automatically 

place an offer if the price level that had been the best bid became the best offer. As Trader A 

stated to Thakkar, “... in the above example the 300 lot will only join the 51 bid if the 54 offer is 

traded and the price goes 54 Bid.” 

20. Trader A told Thakkar that for both the Join and Join Side order types he wanted 

the custom trading application to include a check box that when selected applied the Back-ofBook function to the Join and Join Side order types. Trader A told Thakkar that he wanted the 

Back-of-Book function to include two features. First, Trader A explained to Thakkar in the 

October 12, 2011, email that: 

“For both of the above order types we need to have the option to 

keep the order at the back of the book... we will have to make it 

that the order is increased by 1 every time an order greater than say 

20 lots is placed. This value may be subject to change.” 

Trader A told Thakkar that he planned to use the Back-of-Book function to trade the E-mini 

S&P. Thakkar understood that under the Globex matching system for the E-mini S&P, 

increasing an order by one lot would move an order to the back of the queue at a particular price 

level in the E-Mini S&P order book. The Back-of-Book Spoof Order would not be hit or lifted 

until after all the visible orders ahead of the Back-of-Book Spoof Order at that price level were 

filled. 

21. Second, Trader A told Thakkar that if an order placed with the Back-of-Book 

function was hit or lifted by an order placed by another market participant, the Back-of-Book 

function would immediately and automatically cancel the remaining, unfilled portion of Trader 

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A’s order before it could be hit or lifted by another order. Trader A specified to Thakkar in an 

email on November 4, 2011, that for orders placed with the Back-of-Book function, “[t]he order 

is deleted when the first clip is hit into it, whether that clip is a 1 lot or 100 lot.” 

22. Trader A requested that Thakkar and Edge include this automatic cancellation 

feature to make it easier for him to cancel the Join and Join Side orders he placed with the Backof-Book function, before any of these orders resulted in an executed trade. According to Trader 

A, he always intended to cancel any Join or Join Side order he placed with the Back-of-Book 

function enabled. 

23. Beginning in October 2011, Thakkar and Edge designed and developed the Backof-Book function to include these two features. Thakkar directed Edge employees to begin work 

on the programming, and he oversaw their progress. In a document Thakkar emailed to Trader A 

on November 10, 2011, Thakkar explained his understanding of the features that Trader A had 

requested and told Trader A that that he and Edge were designing the custom trading software 

application to function exactly as described: 

x “If “Back-of-Book” option is checked, based on the threshold qty (assume the 

default value 10 is used), the app will increase/decrease the order qty by 1 lot 

(after this ... order is activated) every time new lots more than 10 (exclude 10) are 

placed on this order. Example: another 10+ qty order comes, change to 299, 

another 10+ qty order comes, change to 300. Keep changing between 299 or 

300.” 

x “If and only if ‘Back of the book’ option is checked for this . . . order, upon partial 

fill event, unfilled qty will be deleted.” 

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24. Thakkar provided the initial version of the custom trading software application to 

Trader A on November 16, 2011. Trader A responded that “[o]verall, I’m quite impressed and 

excited with it.” 

25. After November 16, 2011, Thakkar and Edge continued to further design and 

develop the custom trading software application to improve its operation and address problems 

raised by Trader A. Thakkar participated in several web meetings with Trader A in which 

Thakkar had the opportunity to observe Trader A’s trading of the E-mini S&P and hear Trader A 

explain how he wanted the Back-of-Book function to operate. 

26. Thakkar sent Trader A updated versions of the custom trading software 

application on December 14, 2011, and again on January 10, 2012. Between January and May of 

2012, Thakkar, and other Edge programmers working at Thakkar’s direction, continued to 

communicate with Trader A and make modifications to the operation of the application, 

including the Back-of-Book function. 

27. Thakkar and Edge designed and developed the Back-of-Book function in order to 

help Trader A place Spoof Orders and inject false information regarding supply and demand for 

the E-mini S&P into the market. Throughout the design and development of the Back-of-Book 

function, Thakkar understood that Trader A intended to use the Back-of-Book function to place 

Spoof Orders. Thakkar knew that Trader A wanted orders placed with the Back-of-Book 

function always to remain behind other orders at a particular price level, minimizing the chance 

that Trader A’s orders would result in executed trades. Based on Trader A’s request that the 

Back-of-Book function immediately and automatically cancel any order placed with the Back-ofBook function as soon as any portion of that order was hit or lifted by an order from another 

market participant, Thakkar understood that Trader A intended to cancel these Back-of-Book 

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orders before they resulted in an executed trade. Thakkar further understood that together, these 

two features of the Back-of-Book function would help Trader A send false signals of supply and 

demand for the E-mini S&P to other market participants by giving Trader A a way to place and 

leave large orders which appeared to other market participants to be genuine orders, but which 

Trader A intended to cancel before they resulted in executed trades. 

28. Based on his experience working with traders to design and develop trading 

software applications, Thakkar knew and understood that market participants consider 

information in the order book when making trading decisions. Thakkar further knew and 

understood that market participants would react to the false signals communicated by the Spoof 

Orders Trader A intended to place with the Back-of-Book function and use that information in 

making trading decisions. Thakkar and Edge designed and developed the Back-of-Book 

function to help Trader A accomplish his goal of tricking other market participants and luring 

them into making decisions and executing trades based on the false signals communicated by his 

Spoof Orders. 

29. Thakkar’s understanding that Trader A intended to use the Back-of-Book function 

to place Spoof Orders is reflected in the contract between Edge and Trader A that Thakkar 

prepared and sent to Trader A on or around January 25, 2012. In this contract, Thakkar 

summarized the various functions and features that Edge would program into the custom trading 

software application, including the Back-of-Book function. In the contract, Thakkar noted that 

“he [Trader A] doesn’t want to be hit on the join orders” placed with the Back-of-Book function. 

Trader A agreed to this contract and signed it electronically sometime on or around January 25, 

2012. Thakkar signed the contract on behalf of Edge. 

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30. In his communications with Thakkar regarding his requirements for the custom 

trading software application, Trader A gave Thakkar examples of how he wanted the various 

functions, including the Back-of-Book function, to operate. In those examples he gave to 

Thakkar, Trader A consistently referenced order sizes of approximately 300 contracts. Thakkar 

understood that Trader A planned to use the Back-of-Book function to place orders of 

approximately 300 contracts in the E-mini S&P order book order that Trader A did not want to 

be hit or lifted on. 

31. Thakkar also understood that Trader A wanted to conceal the behavior of the 

orders that he placed with the Back-of-Book function from other traders in the market. Trader A 

asked Thakkar to design the Back-of-Book function so that it did not move Trader A’s order to 

the back of the queue every time another market participant placed an order at that price level, 

but only when the new order exceeded a certain minimum quantity. Trader A told Thakkar that 

increasing and decreasing the size of his order by one lot every time a new order was placed 

“started to look a little strange with 1 lots changing all the time, so we will have to make it that 

the order is increased by 1 every time an order greater than say 20 lots is placed. This value may 

be subject to change.” 

32. Thakkar recognized that the custom trading software application he designed and 

developed for Trader A, including the Back-of-Book function, was a powerful tool containing 

functions and features that would be useful and valuable for other traders. As a result, Thakkar 

sought to capitalize on it. Thakkar and Edge initially offered to design and develop the 

application “for a fixed price of $12,500 for the projects, with rights to resell the app. This is 

sort of below cost for us, but we would do it in hopes to make money by selling it to other 

customers.” Thakkar later increased the price of the application to $24,200 in the January 25, 

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2012 contract between Trader A and Edge, which incorporated additional specifications from 

Trader A, but reserved in that contract “all rights to modify, use or sell any code, or derivative 

work in any form.” 

33. During the time when Thakkar and Edge designed and developed the Back-ofBook function for Trader A, Thakkar was knowledgeable regarding the various strategies used 

by high frequency and algorithmic traders. Thakkar was also familiar with how these trading 

strategies could affect and did affect trading in futures markets, including the potential for certain 

trading strategies to cause disruptions to orderly trading in futures markets. During the time 

when Thakkar and Edge designed and developed the Back-of-Book function for Trader A, 

Thakkar understood and was familiar with the practice of spoofing. Beginning in March 2012, 

Thakkar participated in the CFTC’s Technology Advisory Committee’s Subcommittee on High 

Frequency Trading. The Subcommittee on High Frequency Trading was formed to analyze and 

develop recommendations regarding the definition of high frequency trading in the context of the 

larger universe of automated trading. In this capacity, Thakkar participated in a working group 

consisting of representatives from a variety of firms in the trading industry, as well as CFTC 

staff. One of the topics addressed by the working group in which Thakkar participated was 

trading practices and strategies that used high frequency trading techniques, including spoofing. 

C. Trader A Used the Back-of-Book Function To Engage in Spoofing 

34. Trader A used the Back-of-Book function developed by Thakkar and Edge to 

place Spoof Orders at various price levels of the visible order book for the E-mini S&P, 

including at the best bid or the best offer. Trader A used the Back-of-Book function to place 

Spoof Orders in the visible E-mini S&P order book, where they appeared to be genuine orders 

and tricked other traders into thinking that Trader A actually wanted to buy or sell the number of 

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contracts specified in these Spoof Orders. Trader A intended to cancel these Spoof Orders 

before they resulted in executed trades. 

35. By placing these Spoof Orders with the Back-of-Book function, Trader A 

minimized the chance that these Spoof Orders would be hit or lifted by other market participants 

and was able to automatically cancel these Spoof Orders before they resulted in executed trades. 

The purpose of the Spoof Orders Trader A placed with the Back-of-Book function was to place 

large orders in the visible E-mini S&P order book to affect prices, but minimize the chances that 

such orders would result in executed trades. The Back-of-Book function helped Trader A inject 

false information into the market regarding supply and/or demand for the E-mini S&P and lure 

other market participants into reacting to this false information. Trader A was thus able to trick 

other market participants into executing against orders he placed on the opposite side of the 

market—allowing Trader A to profit, mitigate potential losses, and/or liquidate positions at more 

favorable prices than were otherwise available without the use of the Back-of-Book Program. 

36. Trader A used the Back-of-Book function to engage in spoofing in the E-mini 

contract between at least January 30, 2013 and October 30, 2013. 

37. For example, on February 22, 2013, at approximately 10:17:07 CST, Trader A 

placed a 722-lot Back-of-Book Spoof Order to buy at 150400 in the March13 E-mini S&P 

contract (the 150400 Spoof Order). The 150400 Spoof Order was at the third-best bid and joined 

2,034 other lots at that level. The Back-of-Book function designed and developed by Thakkar 

and Edge automatically modified this order, switching between 722 and 723 lots a total of 25 

times and returning to the end of the queue of outstanding buy orders on the CME at 150400 

each time it increased its volume by one lot. As a result, this Back-of-Book Spoof Order 

remained on the market, unexecuted, for nearly two minutes. By the time Trader A canceled the 

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order, the 150400 Spoof Order was at the best bid and made up nearly forty percent of total order 

quantity at that price level. While the 150400 Spoof Order was on the market, Trader A placed a 

376-lot sell order at the price of 150450 and was filled. 

38. In another instance, on February 25, 2013, at approximately 12:48:52 CST, 

Trader A used the Back-of-Book function to place three 796-lot Spoof Orders to sell the 

March13 E-mini S&P contract. These Back-of-Book Spoof Orders were placed at prices of 

150450 (150450 Spoof Order), 150475 (150475 Spoof Order), and 150500 (150500 Spoof 

Order). At the time Trader A placed these orders, the 150450 Spoof Order was at the best offer, 

or level 1 of the order book and comprised 49 percent of the 1,634 total lots in the order book at 

that level. The 150475 Spoof Order was placed at the third best offer, or level 3 of the order 

book, and comprised 34 percent of the 2,357 total lots in the order book at that level. The 

150500 spoof order was placed at the fourth best offer, or level 4 of the order book, and 

comprised 39 percent of the 2,043 total lots in the order book at that level. Over the next several 

seconds, the Back-of-Book function designed and developed by Thakkar and Edge automatically 

modified each of these orders. Specifically, the 150450 Spoof Order was modified 13 times, 

flipping back and forth between 796 and 797 lots, ensuring that it remained behind other offers 

in the queue and stayed on the market, unexecuted, for approximately 12 seconds, until Trader A 

cancelled the order. The 150475 Spoof Order was modified 10 times, flipping back and forth 

between 796 and 797 lots, ensuring that it remained behind other offers in the queue and stayed 

on the market, unexecuted, for approximately 24 seconds, until Trader A cancelled the order 

(after that price level had become the best offer on the market). The 150500 Spoof Order was 

modified 14 times, again flipping back and forth between 796 and 797 lots, ensuring that it 

remained behind other offers in the queue and stayed on the market, unexecuted, for 

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approximately 46 seconds, until Trader A canceled the order (after that price level had also 

become the best offer on the market). In the same millisecond that Trader A canceled the 

150450 Spoof Order, he placed and was completely filled on a 796-lot order to buy at the same 

price level. 

39. The following table summarizes Trader A’s spoofing activity using the Back-ofBook function on February 25, 2013, at approximately 12:48:52 CST: 

Price 

level 

Time of 

entry 

Market 

level at 

time of 

entry 

Spoof 

Order 

Percentage 

of Market 

Times 

Order 

Modified 

Time before 

Cancelation 

(in seconds) 

Market Level 

at cancelation 

150450 12:48:52.

156 

1 [Best 

offer] 

49% 13 12.311 1 [Best offer] 

150475 12:48:52.

355 

3 39% 10 24.119 1 [Best offer] 

150500 12:48:52.

355 

4 34% 14 46.033 1 [Best offer] 

D. Thakkar and Edge Continued To Support Trader A’s Custom Trading Software 

Application Through 2015 

40. Edge and Thakkar continued to develop, troubleshoot, and improve the custom 

trading software application and communicate with Trader A in 2012 and 2013. During this 

time, Trader A continued to communicate with Thakkar regarding his use of the Back-of-Book 

function to place orders in the E-mini S&P that he intended to cancel before they resulted in 

executed trades. For example, on October 24, 2012, Trader A complained to Thakkar that 

automatic cancellation feature of the Back-of-Book function was not working properly: “1st 

click cancel doesn’t work on Join/Join Side – I have been hit numerous clips and the order 

doesn’t pull.” Thakkar agreed to perform additional programming work for Trader A to ensure 

that this feature was operating as Trader A wanted. Thakkar himself tested the automatic 

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cancellation feature of the Back-of-Book function and told Trader A on November 19, 2012, that 

he could not reproduce the issues Trader A had encountered. 

41. After February 2013, Thakkar and Edge remained available to help Trader A with 

the operation and further development of the custom trading software application. In December 

2014, Trader A told Thakkar that he had taken a six-month break from trading but now needed 

help from Thakkar and Edge because the application had stopped working. At this time, Trader 

A sought help from Thakkar and Edge to restore all the functions of the application, including 

the Back-of-Book function. Thakkar and Edge agreed to continue to design and develop the 

application to restore Trader A’s ability to use it, including the Back-of-Book function. In 

December 2014, Thakkar sent Trader A a new version of the application again that Thakkar 

believed fixed the problem identified by Trader A. Trader A responded that it still did not work 

and that he was “getting screwed here without the app.” 

42. After receiving the new version of the custom trading software application from 

Thakkar on December 14, 2014, Trader A continued to communicate to Thakkar his urgent 

request for further design and development of the application, at one point saying “I really need a 

working version for this morning trading in the US, am used to having the app available and it is 

costing me not having it in these volatile markets.” Thakkar and Edge concluded that the 

problems Trader A was encountering resulted from an incompatibility between the original 

version of the application designed by Thakkar and Edge and subsequent updates to the trading 

platform software Trader A used to access the Globex trading platform. Thakkar informed 

Trader A that further developing the application so that Trader A could use it with the new 

version of his trading platform software would require additional programming by Edge 

employees. 

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43. At Trader A’s request, Thakkar and Edge further designed and developed the 

custom trading software application in December 2014 and January 2015 in order to provide 

Trader A with working version of the application. Thakkar sent Trader A new versions of the 

application on at least December 16, 2014 and January 5, 6, 9, and 15 of 2015. Trader A 

continued to make additional requests to Thakkar and Edge for further modifications to the 

application, emailing Thakkar after receiving another new version of the application on January 

15, 2015, that “I really can’t afford to be without the app when its [sic] this volatile.” Shortly 

thereafter, upon information and belief, Thakkar sent the application again. 

44. On or around March 30, 2015, Thakkar and Edge billed Trader A approximately 

$4,000 dollars for approximately 35.5 hours of additional design and development work by 

Thakkar and Edge in December 2014 and January 2015. 

V. VIOLATIONS OF THE COMMODITY EXCHANGE ACT AND REGULATIONS 

COUNT I 

Aiding and Abetting Violations of Section 4c(a)(5)(C) of the Act, 7 U.S.C. § 6c(a)(5)(C) 

Spoofing 

45. The allegations set forth in Paragraphs 1 through 44 are re-alleged and 

incorporated herein by reference. 

46. Section 4c(a)(5)(C) of the Act, 7 U.S.C. § 6c(a)(5)(C) (2012), makes it unlawful 

“for any person to engage in trading, practice, or conduct on or subject to the rules of a registered 

entity that – (C) is, is of the character of, or is commonly known to the trade as, ‘spoofing’ 

(bidding or offering with the intent to cancel the bid or offer before execution).” 

47. Trader A has admitted that he violated Section 4c(a)(5)(C) of the Act at least 

between January 30, 2013, and October 30, 2013. 

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48. By reason of the conduct described above, Edge and Thakkar willfully aided, 

abetted, counseled, commanded, induced, or procured the commission of the acts constituting 

violations of Section 4c(a)(5)(C) of the Act committed by Trader A or acted in combination or 

concert with Trader A in such violations. Pursuant to Section 13(a) of the Act, 7 U.S.C. § 13c(a) 

(2012), Edge and Thakkar are therefore responsible as if they were principals for Trader A’s 

violations of Section 4c(a)(5)(C) of the Act from January 30, 2013, through October 30, 2013. 

49. Section 2(a)(1)(B) of the Act, 7 U.S.C. § 2(a)(1)(B) (2012), provides that the act, 

omission, or failure of any official, agent, or other person acting for any corporation within the 

scope of his employment shall be deemed an act of the corporation. Because the actions of 

Thakkar and the actions of other Edge employees who helped design and develop the Back-ofBook function at Thakkar’s direction were within the scope of their employment with Edge, 

Edge is liable for their acts constituting violations of the Act pursuant to Section 2(a)(1)(B) of 

the Act. 

50. Thakkar controlled Edge, directly or indirectly, and did not act in good faith or 

knowingly induced, directly or indirectly, the acts of Edge that constitute violations alleged in 

this alleged in this Count; therefore, pursuant to Section 13(b) of the Act, 7 U.S.C. § 13c(b) 

(2012), Thakkar is liable as a controlling person for the violations by Edge of Section 

4c(a)(5)(C). 

51. Each and every instance between January 30, 2013, and October 30, 2013, that 

Trader A placed Spoof Orders for the E-mini S&P using the Back-of-Book function constitutes a 

separate and distinct violation of Section 4c(a)(5)(C) of the Act for which Thakkar and Edge are 

responsible as if they were principals under Section 13(a) of the Act. 

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COUNT II 

Aiding and Abetting Violations of Section 6(c)(1) of the Act, 7 U.S.C. § 9(1), and Regulation 

180.1(a)(1) and (3), 17 C.F.R. § 180.1(a)(1), (3) 

Use of a Manipulative and Deceptive Device, Scheme, or Artifice To Defraud 

52. The allegations set forth in Paragraphs 1 through 51 are re-alleged and 

incorporated herein by reference. 

53. Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) (2012), and Regulation 180.1(a)(1) and 

(3), 17 C.F.R. § 180.1(a)(1), (3) (2017), make it unlawful, in connection with a contract for 

future delivery on a registered entity, to intentionally or recklessly: (1) use or employ, or attempt 

to use or employ, any manipulative device, scheme, or artifice to defraud; or, (2) engage, or 

attempt to engage, in any act, practice, or course of business, which operates or would operate as 

a fraud or deceit upon any person. 

54. Trader A has admitted that he violated Section 6(c)(1) of the Act and Regulation 

180.1(a)(1) and (3) at least between January 30, 2013, and October 30, 2013. 

55. By reason of the conduct described above, Thakkar and Edge willfully aided, 

abetted, counseled, commanded, induced, or procured the commission of the acts constituting 

violations of Section 6(c)(1) of the Act and Regulation 180.1(a)(1) and (3) committed by Trader 

A or acted in combination or concert with Trader A. Pursuant to Section 13(a) of the Act, 7 

U.S.C. § 13c(a), Edge and Thakkar are therefore responsible as if they were principals for Trader 

A’s violations of Section 6(c)(1) of the Act and Regulation 180.1(a)(1) and (3) from January 30, 

2013, through October 30, 2013. 

56. Section 2(a)(1)(B) of the Act, 7 U.S.C. §2(a)(1)(B) (2012), provides that the act, 

omission, or failure of any official, agent, or other person acting for any corporation within the 

scope of his employment shall be deemed an act of the corporation. Because the actions of 

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Thakkar and the actions of other Edge employees who helped design and develop the Back-ofBook function at Thakkar’s direction were within the scope of their employment with Edge, 

Edge is liable for their acts constituting violations of the Act pursuant to Section 2(a)(1)(B) of 

the Act.. 

57. Thakkar controlled Edge, directly or indirectly, and did not act in good faith or 

knowingly induced, directly or indirectly, the acts of Edge that constitute violations alleged in 

this alleged in this Count; therefore, pursuant to Section 13(b) of the Act, 7 U.S.C. § 13c(b) 

(2012), Thakkar is liable as a controlling person for the violations by Edge of Section 6(c)(1) of 

the Act and Regulation 180.1(a)(1) and (3). 

58. Each and every instance between January 30, 2013, and October 30, 2013, that 

Trader A placed Spoof Orders for the E-mini S&P using the Back-of-Book function constitutes a 

separate and distinct violation of Section 6(c)(1) of the Act and Regulation 180.1(a)(1) and (3) 

for which Thakkar and Edge are responsible as if they were principals under Section 13(a) of the 

Act. 

VI. RELIEF REQUESTED 

WHEREFORE, the Commission respectfully requests that this Court, as authorized by 

Section 6c of the Act, 7 U.S.C. § 13a-1 (2012), and pursuant to its own equitable powers: 

A. Find Thakkar and Edge responsible as if they were principals pursuant to Section 

13(a) of the Act, 7 U.S.C. §13c(a) (2012), for violating Sections 4c(a)(5)(C) and 

6(c)(1) and (3) of the Act, 7 U.S.C. §§ 6c(a)(5)(C), 9(1), (3) (2012); and 

Regulation 180.1(a)(1) and (3), 17 C.F.R. § 180.1(a)(1), (3) (2017); 

B. Enter an order of permanent injunction enjoining Thakkar, Edge, and all of their 

affiliates, agents, servants, employees, successors, assigns, attorneys, and all 

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persons in active concert with them, who receive actual notice of such order by 

personal service or otherwise, from violating Sections 4c(a)(5)(C) and 6(c)(1) of 

the Act and Regulation 180.1(a)(1) and (3); 

C. Enter an order of permanent injunction restraining and enjoining Thakkar, Edge, 

and all of their affiliates, agents, servants, employees, successors, assigns, 

attorneys, and all persons in active concert with them, from directly or indirectly: 

1. Selling the custom trading application Thakkar and Edge developed for 

Trader A or any application derived from the source code for that custom 

trading application; 

2. Trading on or subject to the rules of any registered entity (as that term is 

defined in Section 1a(40) of the Act, 7 U.S.C. § 1a(40) (2012)); 

3. Entering into any transactions involving “commodity interests” (as that 

term is defined in Regulation 1.3(yy), 17 C.F.R. § 1.3(yy) (2017)) for their 

own personal account or for any account in which either Thakkar or edge

has a direct or indirect interest; 

4. Having any commodity interests traded on their behalf; 

5. Controlling or directing the trading for or on behalf of any other person or 

entity, whether by power of attorney or otherwise, in any account 

involving commodity interests; 

6. Soliciting, receiving or accepting any funds from any person for the 

purpose of purchasing or selling any commodity interests; 

7. Applying for registration or claiming exemption from registration with the 

CFTC in any capacity, and engaging in any activity requiring such 

registration or exemption from registration with the CFTC, except as 

provided for in Regulation 4.14(a)(9), 17 C.F.R. § 4.14(a)(9) (2017); 

8. Acting as a principal (as that term is defined in Regulation 3.1(a), 

17 C.F.R. § 3.1(a) (2017)), agent or any other officer or employee of any 

person (as that term is defined in Section 1a(38) of the Act, 7 U.S.C. 

§ 1a(38) (2012)), registered, exempted from registration or required to be 

registered with the CFTC except as provided for in Regulation 4.14(a)(9), 

17 C.F.R. § 4.14(a)(9) (2017); and/or 

9. Directly or indirectly engaging in, controlling, directing, or providing any 

services relating to computer programming for any person or entity for the 

purpose of trading on or subject to the rules of any registered entity (as 

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that term is defined in Section 1a(40) of the Act, 7 U.S.C. § 1a(40) (2012) 

or entering into any transactions involving “commodity interests” (as that 

term is defined in Regulation 1.3(yy). 

D. Enter an order directing Thakkar and Edge to pay civil monetary penalties, to be 

assessed by the Court, in an amount not to exceed the penalty prescribed by 

Section 6c(d)(1) of the Act, 7 U.S.C. § 13a-1(d)(1) (2012), as adjusted for 

inflation pursuant to the Federal Civil Penalties Inflation Adjustment Act 

Improvements Act of 2015, Pub. L. 114-74, 129 Stat. 584 (2015), title VII, 

Section 701, see Regulation 143.8, 17 C.F.R. § 143.8 (2017), for each violation of 

the Act, as described herein; 

E. Enter an order providing for such other and further remedial and ancillary relief, 

including but not limited to disgorgement, as this Court may deem necessary and 

appropriate; and, 

F. Enter an order requiring Thakkar and Edge to pay costs and fees as permitted by 

28 U.S.C. §§ 1920 and 2412(a)(2) (2012). 

Dated: January 28, 2018 Respectfully submitted, 

PLAINTIFF COMMODITY FUTURES 

TRADING COMMISSION 

/s/Thomas L. Simek 

Chief Trial Attorney 

Thomas L. Simek (DC Bar #57268) 

Margaret P. Aisenbrey (MO Bar #59560) 

Commodity Futures Trading Commission 

4900 Main Street, Ste. 500 

Kansas City, Missouri 64112 

Telephone: (816) 960-7700 

Facsimile: (816) 960-7751 

tsimek@cftc.gov 

maisenbrey@cftc.gov 

Attorneys for Plaintiff 

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