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Trade Spoofing: Crossing International Jurisdictions

On March 4, 2016 Japan’s Securities and Exchange Surveillance Commission filed a recommendation against Blue Sky Capital Management for market manipulation. The complaint describes a classic case of #Spoofing.

Reading the text of the complaint you will find out the following interesting facts:

  1. The trading happened in Japan.

  2. The complaint is against a company located in Australia.

  3. The accounts involved are papered in the  Cayman Islands

International Jurisdictions

Great interest has been generated over the past year in market manipulation, especially spoofing. Regulators around the world have been engaged. What happens when the traders involved cross jurisdictions? This has been evident in the famous Sarao case where the trader is located in London and was spoofing the US markets. My understanding is he is still fighting extradition to the US from the UK.

Failure to Supervise?

Maybe there is another question that our broker dealers need to ask. When the regulators have problems reaching across jurisdictions and fail, or have trouble, reaching to the trader involved, will there be broker dealer liability? If so, will the regulators start issuing fines to broker dealers in their jurisdictions for failure to supervise?


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Tayloe Draughon

Tayloe Draughon

Senior Product Manager

CloudQuant

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10 Dec 2015

Location

Chicago

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This post is from a series of posts in the group:

Financial Services Regulation

This network is for financial professionals interested in staying up to date on financial services regulation happening anywhere in the world. CFOs, bankers, fund managers, treasurers welcome.


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