The practice of high-frequency traders to manipulate the markets through spoofing has become a concern for both market regulators and participants. The dual regulatory regimes for securities and commodities have caused substantial confusion in what could already be called a crisis of confidence in financial markets. To alleviate that confusion and bring balance to the regimes, the SEC should adjust its approach to spoofing enforcement actions. The simplest response, and one for which there is both precedent and contemporary support, is to impose lifetime bans against high-frequency traders who ignore well-established law and repeated warnings to engage in spoofing that is destroying confidence in the U.S. securities markets. The SEC should make this adjustment immediately. Otherwise it risks an influx of manipulative professional traders who will only add to the perception that the stock market is rigged.
