“Spoofing” Gets Illinois Broker Fined And Suspended
Robert T. Bunda from Frankfort, Illinois has been suspended and fined by the Financial Industry Regulatory Authority (FINRA) for illegal trading activity that affected the price of a security traded on the NASDAQ exchange, pursuant to a FINRA news release. The illegal trading activities included an activity called “spoofing”, whereby small limit orders are placed at prices to enhance the National Best Bid or Offer (NBBO) for a security. The trader then takes advantage of the increased prices by executing larger orders at another firm that offers execution at the NBBO. Once the larger order is executed at the artificially inflated price, the trader cancels the initial limit orders used to inflate the NBBO.
FINRA ordered Robert Bunda to pay a fine of $175,000, in addition to paying $171,740 in restitution. He was also suspended for sixteen (16) months for his illegal trading activities that he concealed by the use of some eleven (11) other brokerage accounts. Bunda was employed by Great Point Capital LLC, where he entered some 4,000 small share limit orders to cause the NBBO to increase for a NASDAQ security, according to the FINRA investigation. He would the enter larger orders on the other side of the market to get beneficial execution for his undisclosed personal account and then cancel the limit orders made in his Great Point account. The result was a $171,740 gain from the 400 or so trades he made for his individual benefit by causing the market to artificially move.