Spoofing (Finance)

Spoofing is a disruptive financial trading offense in which a trader places large orders in a market with no intention of ever executing them, to create a false impression of supply or demand and move prices in a direction that benefits other, genuine orders the trader holds, then cancels the fraudulent orders before they can be filled. The United States criminalized the practice under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which defines it as bidding or offering with intent to cancel before execution and allows penalties of up to ten years imprisonment and a million dollars per violation; regulators including the Commodity Futures Trading Commission and the UK Financial Conduct Authority actively prosecute it, as in the 2013 case against trader Michael Coscia.