SEC Sues Firm For $1 Million Over Spoofing

SEC Sues Firm For $1 Million Over Spoofing

No not Citadel or Virtu….

The Securities and Exchange Commission (SEC) filed a lawsuit against Briargate Trading and its co-founder Eric Oscher for allegedly practicing a manipulative trading scheme called “spoofing.”

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The securities regulator explained that in spoofing, a trader places a sham order (spoof) that he or she does not intend to execute, on one side of the market. The non-bonafide buy or sell orders create a false picture that there is an interest in a stock, which offer result to a price change.

The trader will then take advantage of the price change and place a true order on the opposite side of the market. The trader cancels the open, sham orders after executing the bona fide orders,

“Spoofing is an illegal tactic where traders place fake orders to trick others into trading at inflated or depressed prices. Today’s action shows our ongoing resolve to prevent all forms of market manipulation,” said Andrew M. Calamari, regional director of the SEC, New York office.

Allegations against Briargate Trading, Mr. Oscher

In its investigation, the SEC found that Briargate Trading and Mr. Oscher engaged in spoofing from October 2011 until September 2012.

The SEC found the Mr. Oscher focused its spoofing activities on equities listed on the New York Stock Exchange (NYSE). He used his Briargate account to place multiple, large, non-bona fide orders on the NYSE before its trading opened at 9:30 AM. The non-bona fide orders affected the perception of the market regarding the demand and prices of the stocks he spoofed.

According to the Commission, Mr. Oscher took advantage of the price movement in the spoofed stocks by placing real orders on the opposite site of the market to exchanges that opened before the NYSE. He canceled the sham orders before the NYSE opened and unwound the stakes he acquired on other exchanges.

The SEC found that Briargate Trading and Mr. Oscher profited approximately $525,000 from spoofing securities.

Briargate Trading, Mr. Orscher to pay $1 million to settle SEC charges

According to the SEC, Briargate Trading and its co-founder violated the anti-fraud provisions of the federal securities laws and a related SEC antifraud rule. The Commission ordered Mr. Orscher and its firm to cease and desist from causing or doing any future violations of the securities laws.

Mr. Orscher and Briargate Trading agreed to pay more than $1 million to settle SEC charges. The settlement includes $525,000 disgorgement of ill-gotten profits and $37,842.32 prejudgment interest.

Briargate Trading also agreed to pay a civil penalty of $350,000 and Oscher agreed to pay a civil penalty of $150,000.

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Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.
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