U.S. and UK Enforcement Priority: Spoofing - 2020 Highlights and What to Expect in 2021

 
February 24, 2021

In a year of increased volatility across the world’s financial markets, prosecutors, regulators, and exchanges on both sides of the Atlantic sharpened their focus on “spoofing” – i.e., bidding or offering without the intent to execute for the purpose of influencing prices in a direction favorable to a trader’s desired position on the opposite side of the market.

Our white paper (link below) reviews the key developments in spoofing enforcement in 2020, highlights developing risks to market participants, and includes an appendix summarizing every spoofing action resolved in the past year.  We also provide our predictions in both the U.S. and the UK for 2021.

Key Takeaways

  • In 2020, U.S. and UK regulators escalated their investigation and enforcement efforts focused on spoofing in financial markets – a trend that is likely to continue in 2021.
  • The DOJ and the CFTC notched their largest-ever spoofing settlements in 2020; the “price of peace” will surely remain high under the new Administration.
  • As prosecutors pursue aggressive theories of criminal liability that increase exposure to enforcement actions for all market participants, trial and appellate courts will continue to define (and redefine) the scope of prohibited market conduct.
  • Increased access to market data and sophisticated data analytics will enhance regulators’ ability to identify potential enforcement targets.  
  • In this evolving, cross-border enforcement landscape, financial institutions and other market participants must ensure that their internal training, surveillance systems and controls adequately address the increased risks.
     

Read "U.S. and UK Enforcement Priority: Spoofing - 2020 Highlights and What to Expect in 2021"

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