U.S. Commodity Futures Trading Commission today issued an order filing and settling charges against Tower Research Capital LLC, a proprietary trading firm, arising from a manipulative and deceptive scheme, spanning nearly two years and involving thousands of occasions of spoofing in equity index futures.
Jump Trading LLC, was all but invisible until it was among six companies subpoenaed in April by New York prosecutors. Jump has ascended the ranks of high-frequency traders during the past 15 years to become one of the top firms on the Chicago Mercantile Exchange.
The CFTC and its enforcement division are reviewing trading practices in the futures market to ensure they aren’t manipulative, Wetjen said. The agency is also reviewing relationships between exchanges and trading firms, he said.
Critics including some regulators and market participants say that HFT trading, which captured the spotlight in the May 2010 flash crash, serves little purpose, may distort the market and leaves retail investors at a disadvantage.