It turns out Saturday Night Live doesn’t have a monopoly on spoofing.
Michael Coscia, futures trader, was sentenced on July 13, 2016, to three years in prison for engaging in the manipulative market practice known as “spoofing.” Coscia is the first person to be found guilty of this crime since the anti-spoofing law was put into place by Dodd-Frank in 2010.
Spoofing occurs when traders send out many buy and sell orders above and below the market to drive the price down for buy orders and up for sell orders. The spoofer then immediately cancels the original orders and takes advantage of the lower buy prices and the higher sell prices.
Prosecutors hope that this guilty verdict will make it easier for them to pursue criminal action against spoofers in the future, as well as discouraging other traders from engaging in this illegal practice.
Spoofing is covered in our Series 65 and Series 66 study materials. For more information, visit us at http://www.solomonexamprep.com.