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Order and trade data analysis in recent spoofing investigations

Author

Listed:
  • Leonard, Greg

    (Senior Vice President, Cornerstone Research, UK)

  • Haas, Marlene

    (Principal, Cornerstone Research, USA)

  • Pegden, Oliver

    (Partner, Clifford Chance, UK)

Abstract

This paper examines recent enforcement action by the UK Financial Conduct Authority (FCA) in relation to spoofing and, in particular, the FCA's use of trading data analysis in support of its findings. Data analysis has become an increasingly important part of recent FCA market abuse enforcement actions, particularly with respect to spoofing investigations. Where other evidence of manipulative intent is absent, the FCA may seek to infer such intent from order and trading activity where there appears to be no legitimate explanation for it. But — as this paper explains — any such inference must be based on sound analysis: there must be clarity around the sample on which an observed pattern is based as well as any sampled trading which does not appear to fit the observed pattern and which might therefore point away from manipulative intent.

Suggested Citation

  • Leonard, Greg & Haas, Marlene & Pegden, Oliver, 2024. "Order and trade data analysis in recent spoofing investigations," Journal of Financial Compliance, Henry Stewart Publications, vol. 7(4), pages 346-352, May.
    • Handle: RePEc:aza:jfc000:y:2024:v:7:i:4:p:346-352
    as

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    More about this item

    Keywords

    spoofing; market abuse; intent; order and trade data analysis;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • K2 - Law and Economics - - Regulation and Business Law

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