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CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

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Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#121

Post by fnordfnordfnord »

olalonde wrote: post #34
smabie wrote: post #9

Earlier quoted context omitted.

In crypto spoofing is pretty prevalent. There are even tier 1 tradfi market makers who heavily engaged in not just spoofing but quote stuffing as well across crypto markets. It's annoying to see, but not a big deal per se: your order book imbalance features just get weighted less heavily and you move on. ofc spoofing is illegal in tradfi, but if it wasn't, I kind of doubt it would even matter: market participants wou…

There are also trivial technical solutions to this. Make orders non-cancellable for a certain period of time, throttle cancellation rate, etc. Any crypto exchange could implement this and win market share if it is really a feature that traders want.

>Make orders non-cancellable for a certain period of time,

Exactly, in a similar manner that the PDT 4 trades in 5 days rule is implemented.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#122

Post by gokdisjtrdcvv5 »

lottin wrote: post #80
pid-1 wrote: post #69

Earlier quoted context omitted.

Shareholders literally own the company. Not making them accountable for their companies actions is prob the worse incentive system ever.

Apparently you didn't think very hard about that one. If you made the owner of a company criminally liable for any wrong-doing by the company's employees, nobody would risk owning a company. It would be impossible to have an advanced economy with these conditions.

I don’t think that’s what they said

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#123

Post by plebianRube »

ycombobreaker wrote: post #118
plebianRube wrote: post #84

Earlier quoted context omitted.

I don't think people realize how much money JP makes. A cursor search shows that the fine is less than 10% of their last quarter NET income of 12.1 billion. I would certainly keep doing illegal things if my only penalty was a simple fine like that every 10 years.

JPM makes a lot of money doing a lot of things. You need to compare the fine vs. their trading revenue.

Why would I look at just their trading revenue?

The fine was levied against the entire company, not just their trading subsidiary.

>settling charges against JPMorgan Chase & Company (JPMC & Co.) and its subsidiaries, JPMorgan Chase Bank, N.A., and J.P. Morgan Securities LLC (JPMS) (collectively, JPM)

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#124

Post by fnordfnordfnord »

derriz wrote: post #22

Why do CFTC try to police this? For the money or optics? Orders far from the BBO are clearly irrelevant and those close to the BBO are not "free" for the spoofer given they have to bear the risk that the orders could be filled if the market moves. Effectively it means anyone cancelling an order has to worry that their action could be interpreted as "spoofing" - which will make market making more risky and expensive.…

>Effectively it means anyone cancelling an order has to worry

No, it really doesn't. This is a single enforcement action that probably took months or years to put together. The behavior being policed is traders entering thousands of orders in a short period of time and then cancelling the orders after their real orders were filled, and then repeating this behavior over some period of time. Someone who fat fingers an order occasionally, or changes their strategy in response to intraday market movements has nothing to fear.

>For me real manipulation

Yeah those people also suck and I hope they get what's coming to them, even though I know they won't.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#125

Post by tedivm »

maxwelldone wrote: post #77
you-liquidated wrote: post #76

Earlier quoted context omitted.

US prosecutors literally said that they cannot criminally charge JPM (in another case) because that would destabilize the US financial system. They are literally "too big to jail".

What's stopping them from charging the people responsible? Are the people so irreplaceable that they are effectively JPM?

The revolving door between the financial sector and our government- if they jailed people now then when it's their turn to get rich off of their government connections they might risk jail.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#126

Post by caffeine »

Unpopular opinion here: these rules are stupid. It’s like fining or jailing someone for bluffing in poker. Of course people are spoofing or doing other manipulative activity.

Similar things happen in retail all the time with no jail sentences, it’s just not algorithmic. “40% off but the offer ends in 3 hours!” is designed to mislead you into thinking there is a short-term mispricing of the product in a very similar way.

Or the real estate market, where basically every single price you see is a lie.

Or the used car market - it’s $15k, but when you go to pay you find out it’s $5k more to actually get the wheels or something.

If only any of these other markets were HALF as clean and transparent as the lit public order books (even if they were unregulated!) they would be massively better than they are now.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#127

Post by prirun »

you-liquidated wrote: post #76
axismundi wrote: post #29

“This action sends the important message that if you engage in manipulative and deceptive trade practices you will be caught, punished, and forced to give up your ill-gotten gains,” added Division of Enforcement Director James McDonald. No, Mr McDonald, it's quite the opposite. The important message is that if your organization can keep the profits from criminal activities higher than the penalties, they can perpetua…

US prosecutors literally said that they cannot criminally charge JPM (in another case) because that would destabilize the US financial system. They are literally "too big to jail".

Okay, fine. Then just permanently revoke JPM's license, and the license of any personnel involved, to do commodity trading.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#128

Post by fnordfnordfnord »

caffeine wrote: post #126

Unpopular opinion here: these rules are stupid. It’s like fining or jailing someone for bluffing in poker. Of course people are spoofing or doing other manipulative activity. Similar things happen in retail all the time with no jail sentences, it’s just not algorithmic. “40% off but the offer ends in 3 hours!” is designed to mislead you into thinking there is a short-term mispricing of the product in a very similar w…

Other markets are also rife with deceptive, arguably fraudulent practices so they should be policed first? The CFTC isn't even empowered to regulate those other markets.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#129

Post by joshsyn »

caffeine wrote: post #126

Unpopular opinion here: these rules are stupid. It’s like fining or jailing someone for bluffing in poker. Of course people are spoofing or doing other manipulative activity. Similar things happen in retail all the time with no jail sentences, it’s just not algorithmic. “40% off but the offer ends in 3 hours!” is designed to mislead you into thinking there is a short-term mispricing of the product in a very similar w…

I am with you there. We simply can't regulate everything. Often state actors themselves are corrupted or really just hindrance to progress.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#130

Post by ycombobreaker »

derriz wrote: post #117
hatesinterviews wrote: post #109

Earlier quoted context omitted.

> That might looks suspicious sure, but there may be other factors (not reflected in the book) influencing a change of desire on my part I think your example would easily satisfy regulators. But you have to have the logging with real time stamps to prove it or you need to be able to reconstruct the internal state by replaying the market data against that version of the code. Same goes for other pairs trades or other…

> I think your example would easily satisfy regulators. That was kind of my point - the example scenario is clearly legitimate. The problem is that if spoofing is defined as submitting an order with no intent for it to execute, then in that scenario, that's exactly what I've done (for one of the orders). So sure, it's seems clear that I should get a pass for doing it just once. What if I was doing a trade like this e…

But at time of submission, you did intend for one of the orders to execute. you didn't know which one, and you'd be happy with either one filled. those orders look bona finde to me.

An order placed, whose entire purpose is to elicit a reaction from others, is clearly spoofing. the spoofer would be unhappy to get filled at all.

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