Securities: Spoofing and Insider
Trading
CO-9
Background: Securities violations are the subject of
review and enforcement of the Securities and Exchange Commission (SEC), a
federal agency. Two types of violations found in SEC cases are:
(1) spoofing, and (2) insider trading.
Spoofing is a deceptive trading practice
to manipulate the market where traders place fake orders to trick others
into trading at either inflated or depressed prices, resulting in losses
to the deceived purchasers and profits to the spoofing trader. For
further information on spoofing.
https://www.sec.gov/newsroom/press-releases/2015-236
Insider trading is buying or selling on
the basis of personal knowledge the trader has or acquires by benefit of a
relationship not available or known to the general trading public. For
further information on insider trading go to.
https://www.sec.gov/enforcement-litigation/litigation-releases
DISCUSSION
PROMPT:
For this discussion, research further, either spoofing or insider
trading SEC violations. Find and share a case example no more
than 5 years old in SEC cases (do NOT use
the spoofing case already cited in the above press release) that
illustrates the practice you have selected. In your initial Discussion
post cover the following in reporting the case:
Briefly explain spoofing or insider
trading (whichever one you have chosen) and why it is illegal (e.g., effect
on business, society);
What is the specific statute and/or
regulation violated by this conduct?
Identify the SEC case you have selected
and provide a link to the case;
Describe the violation illustrated by the
case, e.g. Who are the parties? What did the violator(s) do
that constituted spoofing or insider trading? Who was harmed by the
violation?
What is the ethical framework you observe
was followed by the violator(s) in committing the illegal conduct?
(Explain.)
Explain how the case was resolved, e.g.,
What happened to the violator(s)? What were the penalties levied against
the violator(s), if any?
Do you believe the result is a just
resolution of the violation? Why or why not?
Share any other thoughts you have on this
topic.
https://www.sec.gov/enforcement-litigation/litigation-releases
