Trader convicted of manipulating commodity prices

CHICAGO -- A high-frequency commodities trader has been found guilty of disrupting commodity futures prices to make $1.4 million.

A federal jury on Tuesday convicted Michael Coscia of fraud and spoofing.

The 53-year-old Coscia was accused of fraudulently earning money through the Chicago-based CME Group - the world's largest operator of futures exchanges - and European futures markets in 2011.

Coscia, of Rumson, New Jersey, artificially bumped up commodities prices by placing orders that he cancelled within milliseconds.

In March 2014, the New York attorney general and the Commodities Futures Trading Commission in Washington both launched investigations into high-frequency computerized stock trading. At the time, "60 Minutes" spoke with best-selling author Michael Lewis on the topic.

The probes in 2014 were announced just ahead of a much-anticipated book on the subject by Lewis called "Flash Boys." In it, Lewis argued that the stock market is rigged to benefit a group of insiders that have made tens of billions of dollars exploiting computerized trading. The story was told through an unlikely cast of characters who figured out what was going on and devised a plan to correct it.

The jury in federal court in Chicago deliberated for approximately one hour before convicting Coscia on all 12 counts, including six counts of commodities fraud and six counts of spoofing.

Each count of commodities fraud carries a maximum sentence of 25 years in prison and a $250,000 fine, while each count of spoofing carries a maximum sentence of ten years in prison and a $1 million fine. Sentencing hearing is scheduled for March 2016.

Prosecutors painted Coscia as a con man who tricked rivals by "making it look like something big was happening in the market." But defense attorney Karen Patton Seymour said Coscia was a "stand-up guy" who had hit upon a clever way to beat far bigger, better-resourced rivals.