High-Frequency Trading Firm Pays $64.7 Million in Record Spoofing Penalty

[LanceJ]

Its all in the game right. Spoofers can be trapped and value traders make money from manipulators. Why more intervention?

 

[JigsawTrading]

So people are still doing what they always did and still appeared to be doing after it was made illegal?

I think the only news here is that they are actually taking action.

 

[MoreLeverage]

Yet another case where prison sentences should be issued instead of fines.

For those who didn’t bother to read the article, the traders in question are likely going to jail, having plead guilty to criminal charges (except perhaps for the Chinese guy who probably fled the country).

On Nov. 2, 2018, Gandhi pleaded guilty to two counts of conspiracy to engage in wire fraud, commodities fraud and spoofing. His sentencing is scheduled for Feb. 7, 2020, before SDTX U.S. District Judge Ewing Werlein Jr. On Nov. 6, 2018, Mohan pleaded guilty to one count of conspiracy to engage in wire fraud, commodities fraud and spoofing, and his sentencing is scheduled for Feb. 13, 2020, before U.S. District Judge Gray H. Miller of the SDTX.

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64 million is not enough. Especially considering they most likely made significantly more than this total.

No, they made significantly less than that. Here’s another article with more details.
https://www.wsj.com/articles/tower-research-to-pay-67-million-to-settle-spoofing-claims-11573155230

Tower’s payment includes $32 million in restitution, $10.5 million in disgorgement of illegal profits, and a $24.4 million penalty.

The traders only made $10M (and got fired). The firm paid at least $50M more than that to settle, and millions more I’m sure in legal and compliance costs. Sounds like a pretty big disincentive to me.

 

[JigsawTrading]

Its all in the game right. Spoofers can be trapped and value traders make money from manipulators. Why more intervention?

Consider the level of education, the drive and determination, the in depth knowledge of what drives the markets & the amount of money earned between these 2 groups of people:

1 - Successful traders
2 - People that make up rules for traders

Do that - and tell me if you still need that question answered.

 

[JigsawTrading]

For those who didn’t bother to read the article, the traders in question are likely going to jail, having plead guilty to criminal charges (except perhaps for the Chinese guy who probably fled the country).


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No, they made significantly less than that. Here’s another article with more details.
https://www.wsj.com/articles/tower-research-to-pay-67-million-to-settle-spoofing-claims-11573155230

The traders only made $10M (and got fired). The firm paid at least $50M more than that to settle, and millions more I’m sure in legal and compliance costs. Sounds like a pretty big disincentive to me.

What happened to the risk manager?

 

[qaz]

Flouting the rules to gain an advantage ought to be punished as someone is losing on the other hand from the manipulation. A good trader can profit in both environments but that is separate to the issue of whether the manipulators should be fined.

 

[remogul92]

Yet another case where prison sentences should be issued instead of fines.

If this went bad another flash crash could've been cooked up. 64 million is not enough. Especially considering they most likely made significantly more than this total. Locking these people up is the only way we make sure the message is clear.

The article did say that 2 of the 3 traders involved will be sentenced next year. I’d love to know what that sentence will be.

 

[MoreLeverage]

What happened to the risk manager?

Gone too I think.

 

[Overnight]

The article did say that 2 of the 3 traders involved will be sentenced next year. I’d love to know what that sentence will be.

Well, I would hope that at least the CME bans them for life from trading CME products, and more hopeful the judge gives them heavy jail time, so they can "Budd Foxx" it for a while, contemplating their bullshit activity. All to make a fast buck.

 

[remogul92]

Well, I would hope that at least the CME bans them for life from trading CME products, and more hopeful the judge gives them heavy jail time, so they can "Budd Foxx" it for a while, contemplating their bullshit activity. All to make a fast buck.

Amen. And the jail time would send a strong message to others that this type of crime won’t be tolerated.