The Financial Industry Regulatory Authority fined Bank of America Securities $24 million for more than 700 instances of spoofing through two former traders. Spoofing is trading in which the asserted trades are not intended to be executed which creates the appearance of market activity to cause other market participants to trade against orders that were actually executed. Finra revealed that a former supervisor for Bank of America and a former junior trader executed 717 instances of spoofing in a U.S. Treasury security to induce opposite-side executions in the same Treasury security or a correlated Treasury futures contract.
Finra says deficiencies in the supervisory systems that BofA Securities had in place were a key cause. Systems set up by the broker-dealer to supervise trading were only designed to detect spoofing when it was done by an algorithm, and not manual spoofing done by a human trader. They also weren’t set up to detect certain orders traders entered through systems provided by third parties, Finra said.
The alleged spoofing took place from 2014 through 2022
JEFFREY NEWMAN AND HIS FIRM ARE WHISTLEBLOWER LAWYERS WHO HANDLE CAUSES UNDER THE SEC, CFTC AND FINCOM WHISTLEBLOWER PROGRAMS. MR. NEWMAN CAN BE REACHED AT 617-823-3217 OR AT JEFF@JEFFNEWMANLAW.COM.