Milbank discusses “Spoofing” in Financial Markets

Section 4c(a)(5)(C) of the Commodities Exchange Act (CEA), 7 U.S.C. § 6c(a)(5)(C), newly added to the CEA by the Dodd-Frank reform legislation, prohibits spoofing as well as activity that is “of the character” of spoofing. The statute defines “spoofing” but does not spell out what conduct may be “of the character of spoofing.” The outer boundaries of that conduct remain unclear. The Commodity Futures Trading Commission (CFTC) has said that the four types of behavior listed in its 2013 guidance on the new spoofing statute are not exclusive. See CFTC, Antidisruptive Practices Authority, 78 Fed. Reg. 31890, 31896 (May … Read more