US spoofing crackdown is a case of misplaced priorities

There are worse HFT practices than spoofing, yet only spoofers go to jail


US authorities are finally coming down hard on financial wrongdoing. But the wrongdoers are not the much-criticised bankers and mortgage brokers who provoked the 2008 financial crisis. Instead, the targets of the current crackdown are spoofers.

Spoofing is a high-frequency trading (HFT) strategy in which a firm places orders only to cancel them almost immediately, creating the illusion of liquidity. This practice was banned by the Dodd-Frank Act.

Anyone who doubts the sincerity of regulators’ an