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US SEC charges trading firm owner, others in 'spoofing' case

Published on Apr 5, 2014 2:38 AM

WASHINGTON (REUTERS) - US securities regulators filed charges against two trading firms and five individuals on Friday in a case involving an illegal manipulative trading practice known as "spoofing."

In its case, the US Securities and Exchange Commission said 37-year-old Joseph Dondero, a co-owner of a New Jersey-based trading firm called Visionary Trading LLC, routinely engaged in spoofing.

Spoofing involves rapidly placing orders to create the illusion of market demand. Unsuspecting traders are then tricked into buying or selling at artificial prices, only to later find that the orders were canceled.

"The fair and efficient functioning of the markets requires that prices of securities reflect genuine supply and demand,"said Sanjay Wadhwa, a senior associate director of the SEC's New York regional office.

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