U.S. regulators’ $14 million settlement with high-frequency trading firm Optiver over oil price manipulation in 2007 is a “milestone” victory in their toughening stance on market malfeasance which is being closely watched by traders. In its first major case against an algorithmic trader, the Commodity Futures Trading Commission said late o n Thursday that a court settlement required the Amsterdam-based firm to disgorge $1 million in profits and pay $13 million over allegations it used a rapid-fire tool nicknamed “The Hammer” to influence U.S. oil prices in 2007.

The settlement came two days after U.S. President Barack Obama proposed a renewed campaign against illegal oil trading schemes. But the case dates back to the Bush administration’s effort to crack down on surging oil prices in late 2007 and 2008 as crude soared toward a record of nearly $150 a barrel. The CFTC alleged that traders in Optiver’s Chicago office engaged in a practice called “banging the close”, in which the firm attempted to move U.S. crude, gasoline and heating oil prices by executing a large volume of deals during the final moments of trading, when exchanges set “settlement” prices. The regulatory agency also alleged that an Optiver official lied to cover up the purported scheme