Signaling a new area of criminal and civil securities enforcement, federal regulators are flexing their newly acquired powers under the Dodd-Frank Wall Street Reform and Consumer Protection Act to curb a trading practice known as “spoofing.”
This enforcement push involves increased coordination with the futures exchanges, heralding a “task force”-type approach to pursuing and sanctioning market participants that engage in spoofing at all levels.
The government’s focus on this new area is yet another way that asset managers and other firms active in the derivatives markets are facing increased scrutiny and — by extension — greater compliance challenges.