Spoofing in Brazilian Financial Market: Case Study of Paiffer Management
DOI:
https://doi.org/10.70678/rpad.v1i1.871Keywords:
Spoofing; Layering; Stock MarketAbstract
Due to the inclusion of new negotiation technologies into the Brazilian stock market, both the volume of trade and the financial products diversification have increased. Technology has improved market dynamics but has also facilitated the practice of financial fraud. As verified by Securities and Exchange Commission of Brazil (CVM), the brokerage firm Paiffer Management Ltda. - ME, an investment company that operates in the Brazilian market, started to send orders (bid or ask) with expressive lot, in the spoofing modality, for the purpose of manipulating share prices. Orders were canceled in a short period of time, with the objective of simulating buying or selling pressure and, therefore, attracting counterparties to carry out their artificial operations. The purpose of this article is to present a literature review on the spoofing topic, research case-study of Paiffer's administrative process, and verify how Paiffer’s operator put into practice spoofing to outpace other market participants.
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