U.S. COMMODITY FUTURES TRADING COMMISSION 


Three Lafayette Centre 


1155 21st Street, NW, Washington, DC 20581 


Telephone: (202) 418-5000 


Facsimile: (202) 418-5538 


Division of 

Enforcement 

NON-PROSECUTION AGREEMENT 

The U.S. Commodity Futures Trading Commission's Division ofEnforcement 

("Division') investigated whether there were possible violations ofthe Commodity 

Exchange Act ("Act") and/or Commission Regulations ("Regulations").· Specifically, the 

Division investigated, inter alia, whether Citigroup Global Markets Inc., and its agents, 

employees, and affiliates ("Citigroup"), engaged in conduct known to the trade es 

"spoofing" in the U.S. Treasuries futures markets and whether Citigroup failed to 

properly supervise its agents and employees with respect to this conduct in 2011 and 

20 I 2 ("Investigation"). Shlomo Salant ("Salant'1

) and the U.S. Commodity Futures 

Trading Commission ("Commission") enter into the following terms and conditions of a 

non-prosecution agreement ("Agreement") in connection with the Investigation and any 

other related enforcement litigation or proceeding to which the Commission is a party 

(together, the "Proceedings"): 

The Commission enters into this Agreement based, in part, on Salant's timely 

and substantial cooperation in the Investigation; his immediate willingness to accept 

responsibility for his misconduct, as described herein; the material assistance he provided 

to the Division in the Proceedings~ including identifying specific misconduct at 

Citigroup; and the absence of a history ofprior misconduct by Salanl 

I. Term 

1. Salant understands and agrees that the provisions of this Agreement are in full 

force and effect from January 31, 2017 to the termination ofthe Proceedings or two years 

from the beginning date of the Agreement which ever is later C'Agreement Period"), 

unless expressly stated otherwise. 

II. Cooperation 

2. Salant agrees to cooperate fully and truthfully in the Proceedings, as directed by 

the Division's staff. So.lant likewise agrees to cooperate fully and truthfully, as directed 

by the Division's staff, in any official investigation or proceeding by any other federal or 

state authority or a self-regulatory organization related to the Investigation and the factual 

statements that are part ofthis Agreement ("Other Proceedings"). The full, truthful, and 

continuing cooperation of Salant shall include, but not be limited to: 

a. 	 preserving and producing to the Commission in a responsive and prompt 

manner, as requested by the Division's staff, all non-privileged documents, 

information, and other materials wherever located, in the possession, custody, 

or control of Salant; 
Page 2 of8 

b. 	 utilizing his knowledge and skill to explain transactions, interpret information 

and tenninology, or identify new and productive lines ofinquiry, as requested 

by the Division's staff; 

c. 	 preparing and appearing for interviews and testimony, at such times and 

places and as requested by the Division's staff; 

d. 	 responding completely and truthfully to all inquiries and interviews, as 

requested by the Division's staff; 

e, 	 identifying and authenticating documents, executing affidavits or declarations, 

and testifying completely and truthfully at depositions, trial, and other judicial 

proceedings; 

f. 	 accepting service by mail, electronic mail, or facsimile transmission of notices 

or subpoenas for documents and/or testimony at depositions, hearings, or 

trials; 

g. 	 appointing Salant's undersigned attorney as agent to receive service of such 

notices and subpoenas; 

h. 	 waiving the territorial limits on service contained in Rule 45 of the Federal 

Rules of Civil Procedure and any applicable local rules in connection with 

requests or subpoenas ofthe Division's staff; and 

i. 	 serving by band delivery or by next-day maiJ all written notices and 

correspondence required by or related to this Agreement to the Director of the 

Division ofEnforcement, U.S. Commodity Futures Trading Commission, 

1155 21st Street, NW, Three Lafayette Centre, Washington, DC 20581. unless 

otherwise directed in writing by the Division'.s staff. 

III. Statement of Facts 

3. Ifthis case had gone to trial, the Commission would have presented evidence 

sufficient to prove the facts set forth in Exhibit A, which Salant admits. 

IV. Prohibitions and Undertakings 

4. During the Agreement Period, Salant understands and agrees to comply with the 

following prohibitions: 

a. 	 To refrain from violating the Act and/or Regulations; and 

b. 	 To refrain from violating the rules promulgated by any self-regulatory 

organization and any registered entity (as that term is defined in 

Section 1a(40) of the Act, 7 U.S.C. § la(40)). 
Page 3 of8 

5. During the Agreement Period, Salant understands and agrees to perfonn the 

following undertakings: 

a. 	 provide written notification to the Division, within fourteen calendar days, if 

Salant has been charged or convicted ofan offense by any other federal or 

state authority, or self-regulatory organization. 

b. 	 provide written notification to the Division, within fourteen calendar days, if 

Salant has been questioned, a formal or informal complaint has been made 

against Salant, or disciplinary action has been taken against Salant, by any 

other federal, state, or self-regulatory organization. 

c. 	 Salant will cooperate fully, as enumerated in Section I. 

6. Nothwistanding the end of the Agreement Period, Salant understands and agrees 

that neither Salant nor any of Salant•s successors and assigns, agents or employees under 

Salant's authority or control shall take any action or make any public statement denying, 

directly or indirectly, any aspect of this Agreement or creating. or tending to create, the 

impression that this Agreement, which includes the statements in Exhibit A, is without a 

factual basis; provided. however. that nothing in this provision shall affect Salant's (i) 

testimonial obligations, or (ii) right to take legal positions in other proceedings to which 

the Commission is not a party. Salant and his successors and assigns shall undertake all 

steps necessary to ensure that all ofSalant's agents and/or employees under Salant's 

authority or control understand and comply with this provision. If it is determined by the 

Division that a public statement by Salant, or by anyone under Salant's authority or 

control, contradicts in whole or in part this Agreement which includes the statements in 

Exhibit A, the Division, at Its sole discretion, may recommend, and the Commission may 

bring, an action or proceeding against Salant in acco1·dance with this Agreement. 

7. . Notwithstanding the end ofthe Agreement Period, before issuing any press 

release concerning this Agreement, SaJant agrees to have the text ofthe release approved 

by the Division's staff. 

V. Violation of the Agreement 

8. Salant understands and agrees that it shall be a violation ofthis Agreement if 

Salant provides false or misleading information or materials in connection with the 

Proceedings or Other Proceedings if he knew or reasonably should have known the 

information or materials to be false or misleading. Providing false or misleading 

information or materials to the Commission also violates Section 6(c)(2) of the Act 

(7 U.S.C. § 9) and also may subject Salant to criminal penalties for providing false 

information to the U.S. Government (18 U.S.C. § 1001), providing false information to 

the Commission (Section 6(c)(2) ofthe Act, 7 U.S.C. § 9), contempt (18 U.S.C. §§ 401­

402), perjury (18 U.S.C. § 1621), making false statements or declarations in court 

proceedings (18 U.S.C. § 1623), and/or obstructingjustice (18 U.S.C. § 1503 et seq.). 

Further, providing false, fictitious, or fraudulent information to a registered entity, board 

of trade, swap data repository, or futures association designated or registered under the 
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Act violates, and may also subject Salant to criminal penalties pursuant to Section 9(a)(4) 

ofthe Act (7 U.S.C. § 13). 

9. Salant understands and agrees that it shall be a violation ofthis Agreement if 

Salant violates the Act and/or Regulations during the Agreement Period. 

10. Salant understands and agrees that should the Division in its sole discretion 

determine that Salant failed to comply with any of the Prohibitions or Undertakings of 

this Agreement, the Division may recommend an enforcement action against Salant for 

violations ofthe Act and/or Regulations, including, but not limited to, the substantive 

offenses relating to the Investigation. fu such circumstances, the Division will exercise 

its discretion whether to notify Salant or Salant's counsel ofa recommended enforcement 

action and whether to provide an opportunity for Salant to make a submission consistent 

with the procedures set forth in Appendix. A to Part 11 ofthe Regulations, 17 C.F.R. pt. 

I I, app. A. Moreover, nothing in this Agreement limits the Division's discretion to 

recommend to the Commission or the Commission's authority to bring an enforcement 

action against Salant for violations not arising from this Investigation or for future 

violations ofthe Act and/or Regulations, without notice, to protect the public interest. 

11. Salant understands and agrees that in the event the Commission docs bring an 

enforcement action against Salant following Salant's violation of this Agreement, any 

documents, statements, information, testimony, or evidence provided by Salant during the 

Proceedings and Other Proceedings, as well as any leads delived therefrom, may be used 

against Salant. 

12. Salant understands and agrees that any enforcement action brought by the 

Commission following Salant's violation ofthe Agreement may be commenced against 

Salant, notwithstanding the expiration of the statute of limitations between the signing of 

this Agreement and the commencement ofsuch action, provided that, applying any and 

all previously executed tolling agreements, the action would not have been time-barred 

by the applicable statute of limitations if brought on the date ofthe ex.ecutio11 ofthis 

Agreement. Salant will not assert any claim or defense based on the passage of time 

from the date ofthis Agreement to the commencement ofany action or proceeding 

against Salant authorized, instituted, or brought by or on behalf of the Commission or to 

which the Commission is a party arising out of the Investigation, including any sanction 

or relief that may be imposed therein, regardless ofwhether such claim or defense is 

constitutional, statutory (including any statute of limitations), or equitable (including 

}aches or other equitable doctrines). It is further undel'stood and agreed that a separate 

tolling agreement is not required to give effect to this paragraph. 

13. If Salant violates this Agreement, Salant agrees not to dispute, contest, or 

contradict the factual statements in Exhibit A as admissions pursuant to Federal Rule of 

Evidence 80l(d)(2), or their admissibility, in any future action or proceeding against 

Salant or any action or proceeding to which the Commission is a party. 
Page S of 8 

VI. Compliance with Agreement 

14. Subject to the full, truthful, and continuing cooperation of Salant, as described 

above, and compliance with all Prohibitions and Undertakings in this Agreement. as 

described above, the Commission will not bring any enforcement action against Salant 

arising from the Investigation. This Agreement should not, however, be deemed an 

exoneration ofSalant or be construed as a finding by the Commission or the Division that 

no violations of the Act and/or Commission Regulations have occurred. 

15. Salant understands and agrees that this Agreement does not constitute a grant of 

immunity by the Commission, nor is it any other form of final disposition. 

16. Salant understands and agrees that this Agreement does not bind any other federal 

or state authority or any self-regulatory organization. The Division may, at its discretion, 

issue a letter to other federal or state authorities or self-regulatory organizations detailing 

the cooperation of Salant during the Proceedings or Other Proceedings, upon Salant's 

written request. 

t 7. This Agreement does not limit or otherwise affect any understandings or 

conditions in any agreements between Salant and any other federal or state authority or 

any self-regulatory organization, and any agreements between Salant and any other 

federal or state authority or any self-regulatory organization do not limit or otherwise 

affect the understandings and conditions set forth in this Agreement. 

18. Salant understands and agrees that the Agreement only applies to enforcement 

actions arising from the Investigation and does not provide protection for any other 

violations or for any individual or entity other than Salant. 

VII. Voluntary Agreement 

19. Salant's decision to enter into this Agreement is freely and voluntarily made and 

is not the result of force, threats, assurances, promises, or representations other than those 

contained in this Agreement. 

20. Salant has read and understands this Agreement. Furthermore, Salant has 

reviewed all legal and factual aspects of this matter with Salant's attorney and is fully 

satisfied with that attorney's legal representation. Salant has thoroughly reviewed this 

Agreement with his attorney and has received satisfactory explanations concerning each 

paragraph of the Agreement. After conferring with his attorney and considering all 

available alternatives, Salant has made a knowing decision to enter into the Agreement. 
Pag~ Gof 8 

VIII. Entirety of Agreement 

21. This Agreement constitutes the entire agreement between the Commission and 

Salant, and supersedes all prior understandings, if any, whether oral or written, relating to 

the subject matter herein. 

22. This Agreement cannot be modified excepl in writing, signed by Salant and an 

authorized representative of the Commission. 

23. In the event an ambiguity or n question of intent or interpretation arises, this 

Agreement shall be construed as if drafted jointly by the parties hereto, and no 

presumption or burden of proof shall arise favoring or disfavoring the Commission or 

Salant by virtue of the authorship ofany of the provisions of the Agreement. 

24. This Agreement may be executed by the parties to it in counterpa1ts, with each 

counterpart constituting the entire Agreement. 

* * * 

C(J_ <t/17 

Dale 

ircctor 

Division of Enforcement 

U.S. COMMODITY FUTURES TRADING 

COMMISSION 

/\GREED /\ND CONSENTED TO: 

Date 	 Shlomo Salant 

I am counsel for Shlomo Salant in this case. I have carefully reviewed this Agreement 

with Sal<mt. To my knowledge, the decision ofSnIant to nter into this Agreement is 

info1mcd 1d v luntary. 

Date 	 Chip Locwcnson 

250 West 55th Street 

New York, NY 10019-9601 

(212) 468-8000 
Page 7 of8 

EXHIBIT A 

Statement of Facts 

1. Salant worked for Citigroup Global Markets Jnc. ("Citigroup") from 2008 to 

2015, trading, among other things, U.S. Treasury futures and cash products on the U.S. 

Treasury desk at Citigroup beginning in August 2009. 

2. From shortly after August 2009 through 2011, Salant traded five- and ten-year 

U.S. Treasury futures and cash products with a senior trader. To learn how to do his job, 

Salant was expected to sit with the senior trader and observe and ask questions. Salant 

learned, among other things, how the senior trader marked his trades and assessed risk for 

purposes of determining when to execute or hedge a trade. 

3. By early 2012, Salant began trading off-the-run two- and three-year U.S. Treasury 

futures and cash products. At the time, Salant was the only b·ader for those financial 

instruments. In or around May 2012, Salant began trading all of the on-the-run U.S. 

Treasury futures and cash products across the entire curve with the head trader on the 

desk. 

4. During his time at Citigroup, Salant devised a strategy that he believed would 

cause his orders to be filled at favorable prices, in a timely ma1mer-specifically, by 

placing large orders on the opposite side ofthe market from smaller orders that Salant 

wanted to trade and quickly cancelling the large orders before they were executed. In 

these scenarios, the large orders were entered with the intent to cancel before execution. 

5. From at least July 16, 2011 through 2012, Salant employed this trading strategy 

approximately 35 times. Each time, Salant entered a large brief order on the opposite 

side ofthe same or correlated market as the smaller order he wanted to trade. Salant 

believed that order book imbalance was one factor that algorithmic traders looked at to 

predict the direction ofthe market and that placing a large order on one side ofthe market 

that created or increased market imbalance would induce an algorithmic trader to trade 

with Salant's smaller order on the other side ofthe market. Salant engaged in spoofing 

(i.e., bidding or offel'ing with the intent to cancel the bid or offer before execution) to get 

his smaller orders on the opposite side of the same or correlated market filled (and fiJied 

more quickly) at the prices he wanted. 

6. On one occasion prior to 2011, a large order placed by Salant-that he did not 

intend to execute-traded and resulted in a loss. At that time, Salant reported this 

incident to the then-head of Citigroup's U.S. Treasury desk, the same person with whom 

Salant traded the five- and ten-year sectors. To Salant's knowledge, the head ofthe desk 

did nothing besides telling Salant not to do it again. 

7. In January 2012, a trader in Tokyo covering Citigroup's U.S. Treasury desk 

employed a strategy similar to Salant's. One of the large orders placed by this trader 

(4,000 futures contracts in the ten-year)-which the trader did not intend to execute-­

traded and resulted in a loss. Salant discussed this incident with the Tokyo trader and 
Page 8 of8 

told him that an order for 4,000 contracts was a lot to place in such an illiquid market. 

Salant also mentioned that he had previously done the same thing using an order of l,000 

contracts. Salant suggested to the trader in Tokyo that he not do it again. 

8. In October 2013, Salant was interviewed by the CME during which he admitted to 

the misconduct described above. Salant admitted to the same in testimony with the 

CFTC in April 2015. 

* * •