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Spoof, Bluff, Go For It: A Defence of Spoofing

Khorasanee, Kasim

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Authors

KASIM KHORASANEE Kasim.Khorasanee@nottingham.ac.uk
Teaching Asscoiate in Philosophy



Abstract

Spoofing—placing orders on financial exchanges intending to withdraw them prior to execution—is widely legally prohibited. I argue instead on two main grounds that spoofing should be permitted and legalised. The first is that spoofing as a form of bluffing remains within the market practice of making legally binding offers—as opposed to lying or betraying trust—and primarily concerns the spoofer’s personal information. As a form of bluffing spoofing helps prevent financial speculators, in particular high-frequency algorithmic traders, from easily profiting by other market actors reliably revealing their underlying preferences through their market activity. The second is that at the systemic level permitting spoofing would benefit non-speculative actors who place orders to hedge economic risk and whose activities provide the raison d’être for financial exchanges, differentiating them from simple forums for gambling. I also address potential concerns that legalised spoofing would drive speculators out of financial markets entirely and, therefore, undermine market liquidity. This work contributes to the wider debate in business ethics regarding bluffing by illustrating the acceptability of bluffs which do not betray counterparty trust or reliance on testimony by remaining within the framework of market practices.

Citation

Khorasanee, K. (2022). Spoof, Bluff, Go For It: A Defence of Spoofing. Journal of Business Ethics, https://doi.org/10.1007/s10551-022-05296-7

Journal Article Type Article
Acceptance Date Nov 11, 2022
Online Publication Date Nov 30, 2022
Publication Date Nov 30, 2022
Deposit Date Dec 2, 2022
Publicly Available Date Dec 2, 2022
Journal Journal of Business Ethics
Print ISSN 0167-4544
Electronic ISSN 1573-0697
Publisher Springer Science and Business Media LLC
Peer Reviewed Peer Reviewed
DOI https://doi.org/10.1007/s10551-022-05296-7
Keywords Law; Economics and Econometrics; Arts and Humanities (miscellaneous); General Business, Management and Accounting; Business and International Management
Public URL https://nottingham-repository.worktribe.com/output/14320603
Publisher URL https://link.springer.com/article/10.1007/s10551-022-05296-7
Additional Information Nottingham Centre for Normative Political Theory

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