US spoofing crackdown is a case of misplaced priorities

There are worse HFT practices than spoofing, yet only spoofers go to jail

alexander-osipovich

US authorities are finally coming down hard on financial wrongdoing. But the wrongdoers are not the much-criticised bankers and mortgage brokers who provoked the 2008 financial crisis. Instead, the targets of the current crackdown are spoofers.

Spoofing is a high-frequency trading (HFT) strategy in which a firm places orders only to cancel them almost immediately, creating the illusion of liquidity. This practice was banned by the Dodd-Frank Act.

Anyone who doubts the sincerity of regulators’ an

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