Jake's View | The strange case of the robber bitten for spoofing his own stock
While our regulators are happy to let big investment banks manipulate the market they won’t stand for it when attempted by smaller players
In the latest sign of an intensified clampdown on excessive speculation, the China Securities Regulatory Commission fined local investor Wu Junle 1 million yuan (US$151,185) for trading stocks between accounts with the same ownership and spoofing, or quickly cancelling orders that are placed to create false buying or selling sentiment.
Business, December 6
Securities regulators have a way of appropriating the everyday idiom of the English language to create new technical terms for securities offences.
It is not really surprising that they should have to do this as the offences themselves are new. I don’t recall much objection to what they call “spoofing” when I started my career in broking. I am only surprised at how quickly regulators in China have adopted the jargon.
What is so wrong about “spoofing”?
Here we have a player in the market who decides to work up wider interest in a stock of which he is usually a principal corporate founder, and trades it back and forth across different accounts he holds to generate an illusion of liquidity or of impending big news.
Oh, sorry, no, that’s wrong.
