The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 defines spoofing as bidding or offering with the intent to cancel the bid or offer before execution. In recent years, there has been a surge in the number of cases filed by the Department of Justice (DOJ), the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) on alleged spoofing-related matters. Many of these allegations have been made about activity in futures markets.
In this Insights, we provide background for readers to help them understand futures markets and orders that regulators have alleged to be spoofing attempts. We also provide information on how the markets have evolved over the 10 years from 2009 to 2018.