SEC accuses NY trading firm of “spoofing”

October 09 07:51 2015

A New York trading firm and its co-founder have agreed to a more than $1 million Securities and Exchange Commission settlement over profiting from alleged financial market manipulation known as “spoofing.” Briargate Trading LLP and co-founder Erich Oscher placed sham trading orders to create the false appearance of interest in stocks and move their prices up or down between Oct. 2011 and Sept. 2012, the SEC said Thursday.SEC Porn

After entering spoof orders for New York Stock Exchange-listed securities, Oscher placed genuine orders on the opposite side of the market for the same stocks and took advantage of the artificially inflated or depressed prices caused by the spoofs, the SEC charged.

After the genuine orders were executed, Oscher canceled the spoof orders, the SEC said.” Oscher took advantage of our interconnected markets by placing non-bona fide orders on one exchange, and then buying or selling the spoofed securities at artificial prices on other exchanges,” said Joseph Sansone, co-chief of the SEC Market Abuse Unit. “Notwithstanding these deceptive tactics, the SEC was able to uncover Oscher’s fraudulent scheme and hold him accountable for his actions.”

Briargate and Oscher neither admitted nor denied the SEC findings. But they agreed to disgorge $525,000 of improper gains plus $37,842 in prejudgment interest. The company and co-founder also agreed to pay a combined $500,000 in civil penalties. Defense attorney Jeffrey Robertson declined to comment on the settlement. Wall Street-based Briargate — an anagram of arbitrage — is a proprietary trading firm that uses algorithms and high-speed computers to conduct business.  According to an SEC order, Oscher began using his Briargate account in Oct. 2011 to place spoof orders for 10,000 shares or more on the NYSE before daily trading opened.

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