BGC Financial, L.P.
BGC Financial, L.P. fined $200,000 for failing to establish and maintain a supervisory system reasonably designed to detect potential spoofing and layering in equity securities.
The findings stated that the firm did not initially have any supervisory system, including surveillances or supervisory reviews, to monitor for potential spoofing or layering by firm traders but later implemented automated surveillance to identify potential instances.
The surveillance, however, had certain unreasonable parameters. Certain of the firm’s surveillance parameters for spoofing and layering required the entry of a large order on both sides of the market, a significant number or high total share volume of layered orders on one side of the market, or a very high volume of cancelled orders. These parameters were unreasonable because layering and spoofing could also occur with smallersized or single orders, and the firm’s trading included such orders.
