
Another ex-JP Morgan precious metals trader pleads guilty to ‘spoofing’ - momentmaker
https://www.cnbc.com/2019/08/20/another-ex-jp-morgan-precious-metals-trader-pleads-guilty-to-spoofing.html
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cryptozeus
“Trunz, who earlier today resigned from his position as an executive director
at J.P. Morgan, said he “learned to spoof from more senior traders, and
spoofed with the knowledge and consent of his supervisors,” according to the
Department of Justice.”

Seems like a systemic issue and this guy is just a little fish in the sea

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Scoundreller
> pleaded guilty Tuesday to criminal charges of manipulating the precious
> metals markets for nine years.

> Christian Trunz, 34, of London

Started off pretty early...

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1e-9
The newsworthy aspect of this article is the trader's claim that his illegal
activity was sanctioned by his supervisors at a large financial institution.
The fact that a spoofer was caught and punished isn't news as that happens on
a daily basis.

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goldenkey
When behavior becomes so common that it is normalized. A common phenom of
corporate culture, see the Boeing 737 Max thread for a good discussion of this
pervasive issue with corporations/capitalism:
[https://news.ycombinator.com/item?id=20552054](https://news.ycombinator.com/item?id=20552054)

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blancheneige
I don't see anything fundamentally wrong with spoofing. If you really mean
your market order then you don't care about whether resting orders are
bluffing, unless you're bluffing yourself. You'll be matched against the best
available bid/ask before these can be causally removed, period.

~~~
1e-9
It's fundamentally wrong because markets exist to facilitate the efficient
exchange of assets and spoofing lowers this efficiency. More specifically,
spoofing tricks others into thinking that their transaction costs will be
higher or lower than reality. This causes participants to transact at
unnecessarily bad prices, which damages the price discovery process and adds
cost.

~~~
blancheneige
>More specifically, spoofing tricks others into thinking that their
transaction costs will be higher or lower than reality.

How so? If you want to market buy 100 shares at time t and the "spoofed" limit
order is up at time t, you will buy into the spoofed order. Only if the
spoofer somehow has knowledge of your intention to buy at time t and quickly
pulls the rug from under your feet at time t-t1, where t1 would have to be an
unrealistically small amount of time, can they mess with you. So clearly this
argument against spoofing, i.e. that it's creating a false sense of liquidity,
doesn't work in an environment when the quote can flicker dozens of time per
millisecond.

It's more likely that spoofing is used to, say, protect a margin position from
liquidation by flashing a wall above/below it hoping to scare away other
market participants. In which case it shows the latter don't really mean their
move to begin with, or that they are merely trading to squeeze gains on short
timeframe, which has hardly anything to do with "facilitating the efficient
exchange of assets".

~~~
1e-9
The spoofer tricks you into doing something you would otherwise not do. See my
example below in my reply to baybal2.

