DOJ Abandons "Secondary" Spoofing Case

After software developer Jitesh Thakkar's criminal trial on "spoofing"-related charges ended in a mistrial two weeks ago, the Government determined it will not seek to retry the case.  

Thakkar was originally charged with conspiracy to commit spoofing and with two counts of spoofing arising out of his company's development of software that enabled a London-based trader to more efficiently spoof the market for E-Mini S&P 500 futures contracts.  The trial judge granted Thakkar's mid-trial motion for a judgment of acquittal on the conspiracy charge based on the lack of evidence of any agreement between Thakkar and the London trader, but the judge allowed the spoofing counts to proceed to the jury.  The jury deadlocked 10-2 in favor of Thakkar on those charges.      On April 23, 2019, the U.S. Department of Justice (DOJ) filed a motion to dismiss the indictment—two days before the parties were to appear for a status conference to discuss whether DOJ would seek to try Thakkar again.  The trial judge granted the motion, effectively ending the case. This result adds to DOJ's mixed track record in spoofing cases.  Despite the landmark conviction of Michael Coscia for spoofing, DOJ has now lost the other two spoofing cases it has taken to trial.  In 2018, a Connecticut jury acquitted Andre Flotron of conspiracy to commit commodities fraud by spoofing after prosecutorial missteps left only that charge remaining against him.  The difficulty of proving an agreement to spoof or specific knowledge of wrongdoing in cases involving spoofing suggests that DOJ may reassess its burden of proof before trying cases against secondary actors.