When Is a Bid or Offer a 'Spoof'?

June 5, 2018  |  Business Crimes Bulletin

Following the government’s first criminal conviction for spoofing in United States v. Coscia, questions remain about what makes a commodity futures trader’s conduct illegal instead of a legitimate trading strategy. In this article, we analyze the confusion faced by commodity futures traders in assessing whether their trading strategies constitute illegal spoofing, examine whether the Commodity Futures Trading Commission (CFTC) and Seventh Circuit have provided sufficient guidance on the distinction between spoofing and legitimate trading activity, and highlight why the Supreme Court’s recent decision to deny Coscia’s petition for writ of certiorari will have significant consequences for the many spoofing actions currently pending before the courts, as well as for commodity futures trading in general.

When Is a Bid or Offer a 'Spoof'? (pdf | 297.52 KB)