91–100 of 200 posts
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Shareholders can't be asked to police the company. That's not their job. They don't have the resources nor the expertise to do it.
Shareholders literally own the company. Not making them accountable for their companies actions is prob the worse incentive system ever.
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They don’t. They clearly cover both cases.
> those close to the BBO are not "free" for the spoofer given I missed this earlier, but it's not a good argument. It's all about risk-adjusted expected value. There's a distribution of payoffs to spoofing, and it skews far to the right. The conceptual categories of "free" vs "not-free", or "risky" vs "riskless" is the wrong mental framework for evaluating this problem. Yes, it's not risk-free, but why is that releva…
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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?
For the uninitiated, "spoofing" does NOT mean what you think it might, e.g. spoofing network packets or making fake trade records. "Spoofing" simply means placing orders on the exchange orderbook which one supposedly does not intend to execute. I've never understood this, because any bid/ask order on the orderbook CAN be executed against, until it is canceled. If they were "flashing" large bids/asks that were being i…
I think a market where everyone spoofs with impunity is a hellhole. Yes it’s hard to define and police, but that’s probably better than the alternative.
"Act fast because these are selling like hotcakes!"
"I've got another guy who wants to buy the car for $5k but I'd sell it to you for $6k if you can bring cash today."
"It's a buyer's market right now, so we should probably be willing to negotiate on the price as we sell your home."
I bet even with $920M fine they're still profitable
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It’s crazy. If one tried to steal 10k from the bank, you would go to jail. If you steal millions through illegal trade practices, you just pay a fraction of what you stole.
Even if they had exactly the same outcome, one is theft the other is simply breaking the rules. It's a bit like killing a person using a gun and killing a person as a result of driving like the rules don't apply to you. Once it is established that you did the act, the first one undoubtedly puts you in jail for a very long time no matter who you are and the second one may get you a fine and no jail time so that no har…
Actually, this isn't necessarily true. Example regarding the college admission scandal that demonstrates that just because a dollar wasn't "stolen", something of value was.
The admissions slots were stolen from the colleges and resold on the black market. Which is a crime, for good reason. We don’t have to act like there wasn’t a legal, primary market for the admissions slots already.
I think the key is not to understand this as a crime against other applicants, or the public, or “fairness.” It’s a crime against the schools.
The back door—“institutional advancement,” i.e., giving colleges tons of money—is fine, not because it is “fair,” but because the owner of the asset gets to decide the conditions of its sale. (The fairness of the front door is debatable too, by the way.) The side door is wire fraud, not because it is “unfair”—Singer says here that it’s one-tenth the price of the back door, which kind of seems fairer—but because consultants and coaches are misappropriating the asset and selling it for their own benefit. The law doesn’t protect fairness; it protects property.
https://www.bloomberg.com/opinion/articles/2019-03-13/you-ha...
https://twitter.com/jbarro/status/1105506383770894336
In the JPM fraud case specifically: (FTA)
Through these spoof orders, the traders intentionally sent false signals of supply or demand designed to deceive market participants into executing against other orders they wanted filled. According to the order, in many instances, JPM traders acted with the intent to manipulate market prices and ultimately did cause artificial prices.
Theft, by definition is when someone deprives the right of property from another person. Market participants should have been buying and selling at prices determined by the market. JPM manipulated that and created a profit as a result, thereby deprived other people from their profit.
So yes this is absolutely theft, just not the physical theft you're used to seeing when a robber walks into a bank and steals cash.
Earlier quoted context omitted.
It’s crazy. If one tried to steal 10k from the bank, you would go to jail. If you steal millions through illegal trade practices, you just pay a fraction of what you stole.
Even if they had exactly the same outcome, one is theft the other is simply breaking the rules. It's a bit like killing a person using a gun and killing a person as a result of driving like the rules don't apply to you. Once it is established that you did the act, the first one undoubtedly puts you in jail for a very long time no matter who you are and the second one may get you a fine and no jail time so that no har…
Can we call it "shooting like rules don't apply to you"?
"one is theft the other is simply breaking the rules"
The other is fraud, also a crime.
“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".
Earlier quoted context omitted.
> those close to the BBO are not "free" for the spoofer given I missed this earlier, but it's not a good argument. It's all about risk-adjusted expected value. There's a distribution of payoffs to spoofing, and it skews far to the right. The conceptual categories of "free" vs "not-free", or "risky" vs "riskless" is the wrong mental framework for evaluating this problem. Yes, it's not risk-free, but why is that releva…
It's relevant because a live quotation on an exchange can be traded and is thus by definition "real" regardless of the intention with which it was submitted.
This is just a restatement of the thing that I was questioning.
Yes, it's real according to the definition that you've put out. The spoof order can be traded against. So? Why does this binary real/not real categorization matter for whether spoofing should or shouldn't be allowed?
An intelligent spoofer isn't going to place large orders directly on the BBO when the fill probability is high. They're going to be doing it when the correlated markets aren't moving against their order, for instance. Or they're going to put it one tick below the BBO and algorithmically pull when a trade hits the level above. So even if they do get filled, which is unlikely if they're smart, it's no big deal since they've made lots of money up until that point and they can get out of the unwanted position without much slippage.