Prosecutions Put High-Frequency Traders On High Alert
Law360, New York ( March 12, 2015, 10:10 AM EDT) -- Within the last six months, two United States attorneys have brought groundbreaking criminal prosecutions against high-frequency traders for manipulating markets through spoofing — i.e., entering a buy or sell order with the intent to cancel before the order's execution. One prosecution targeted high-frequency trading conduct in the commodities market, and the other in the stock market. Given that high-frequency trading accounts for a substantial percentage of trading volume in both markets,[1] these two prosecutions stand as likely harbingers of future criminal investigations and are certainly cause for concern for high-frequency traders, as the consequences for spoofing are no longer limited to civil penalties and industry bans....
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