A record fine from the U.S. Commodity Futures Trading Commission (CFTC) announced yesterday against proprietary trading firm Tower Research Capital LLC is a stark example of diligence and enforcement by one of the leading financial markets trading regulators in the country. The case shows that companies and brokerages are not off the hook with any kind of statute of limitation with respect to market misconduct in previous years.

The imposed fine of $67.4 million against Tower, comprised of $32,593,849 in restitution, $10,500,000 in disgorgement, and a $24,400,000 civil monetary penalty—the largest total monetary relief ever ordered in a spoofing case.

The traders implemented their manipulative and deceptive scheme by placing one or more orders that they wanted to get filled (genuine orders) on one side of the market, typically consisting of passive orders whose quantities are only partially visible to other market participants; and, on the opposite side of the market, placing one or more orders that the traders intended to cancel before execution (spoof orders), typically consisting of fully-visible passive orders for a larger total quantity. Generally, after receiving a full or partial fill on the genuine orders, the traders then cancelled the spoof orders.  In placing the spoof orders, the traders often used an order splitter to enter several smaller, randomly-sized orders in an attempt to obscure their scheme from other market participants.