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)
#2I wish the press release indicated how much JPMS gained, so I could know if JPMS is still significantly ahead after these penalties.
Does the deferred criminal prosecution mean, basically, pay your fine and don't do it again and you won't be prosecuted? So they really face no long term negatives if they gained more by knowingly breaking the law and paying a fine later?
Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)
#3As a trader, that does look really bad. These people know that the market looks at the orders to guess the state of supply and demand. The penalty looks big but it's over an 8 year period.
It's not exactly a secret that some market participants work out some kind of imbalance measure, and of you've ever implemented a system like that, like I've done, it will have crossed your mind that you could shove a load of orders in that mask the imbalance for everyone else. But you have heard of the spoofing rules and you don't do it. If we want a functioning market without a reputation for sharks, there's some rules to be followed.
Iirc they got a guy thrown in jail for this? Sarao or something like that? He had someone build him a spoofing machine and made a lot of money, though it's not clear to me how much was from doing this specifically.
In case you're wondering about that intention to cancel phrase, of course there are participants like market makers who do cancel a lot of orders. In that case it's a matter of them following the market in providing liquidity, they are not doing it to fool everyone.
Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)
#4Just remember all this? It's completely legal in the crypto markets. It's bad here, and its so much worse there.
Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)
#5I wish the press release indicated how much JPMS gained, so I could know if JPMS is still significantly ahead after these penalties. Does the deferred criminal prosecution mean, basically, pay your fine and don't do it again and you won't be prosecuted? So they really face no long term negatives if they gained more by knowingly breaking the law and paying a fine later?
100% agree, the crucial thing to know is if this is just a cost of doing business and is effectively a government bribe to let them keep doing it.
Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)
#6Just remember all this? It's completely legal in the crypto markets. It's bad here, and its so much worse there.
On the other hand, it will always happen given the incentive.
JPM got caught, but how many do not get caught or arrange the spoofing in such a away that they have (more) plausible deniability.
This law is unworkable and not sure if there's anything benefit in the end... as in crypto anyone who spoofs can have their bluff called anytime, so perhaps transparent free-for-all market is better for price discovery than pretending "spoof do not exist and are illegal".
Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)
#7Just remember all this? It's completely legal in the crypto markets. It's bad here, and its so much worse there.
On the other hand, it will always happen given the incentive. JPM got caught, but how many do not get caught or arrange the spoofing in such a away that they have (more) plausible deniability. This law is unworkable and not sure if there's anything benefit in the end... as in crypto anyone who spoofs can have their bluff called anytime, so perhaps transparent free-for-all market is better for price discovery than pre…
> On the other hand, it will always happen given the incentive.
A big negative incentive is law enforcement.
Otherwise you could make the same argument for literally every single other kind of crime. Someone does you wrong? Well there's a big incentive to straight up take their kneecaps. But you know, the law and whatnot seriously disincentivizes that kind of behavior.
> This law is unworkable and not sure if there's anything benefit in the end...
So surely you must be mad that JP Morgan got fined for this right? Supportive of Mr Dimon?
Good for them getting one over on ol' Joe Sixpack, right?
[edit] > as in crypto anyone who spoofs can have their bluff called anytime
Not at all, the overwhelming majority of crypto trading happens on centralized, trusted, opaque exchanges. Off-chain.
Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)
#8I wish the press release indicated how much JPMS gained, so I could know if JPMS is still significantly ahead after these penalties. Does the deferred criminal prosecution mean, basically, pay your fine and don't do it again and you won't be prosecuted? So they really face no long term negatives if they gained more by knowingly breaking the law and paying a fine later?
This whould be the $172M in disgorgement mentioned in the order.
Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)
#9As a trader, that does look really bad. These people know that the market looks at the orders to guess the state of supply and demand. The penalty looks big but it's over an 8 year period. It's not exactly a secret that some market participants work out some kind of imbalance measure, and of you've ever implemented a system like that, like I've done, it will have crossed your mind that you could shove a load of order…
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 would adapt and the world would move on.
Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)
#10I wonder how they spoofed market trades though. It's possible to do it with crypto before the transaction is able to be verified. Alas, JPMorgan Chase will just eat the cost and continue to do sketchy stuff. All the most banks do similar sketchy stuff. That's why credit unions (CU) were made and why I bank with a CU.