April 4, 2014 / 4:33 PM / in 3 years

SEC charges trading firm owner, others with 'spoofing'

The seal of the U.S. Securities and Exchange Commission hangs on the wall at SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst

WASHINGTON (Reuters) - U.S. securities regulators on Friday charged the owner of a New Jersey-based trading firm and several other defendants in a scheme to manipulate the market through an illegal practice known as “spoofing.”

The Securities and Exchange Commission said that Joseph Dondero, a co-owner of Visionary Trading LLC, as well as several other owners and a New York-based brokerage firm called Lightspeed Trading LLC will collectively pay $3 million to settle the charges.

Spoofing involves a trader placing orders without the intention of having them executed, a strategy that tricks people into buying or selling stock at artificial prices.

Reuters reported earlier this week that the FBI is also investigating the practice of spoofing more broadly in a probe into high-speed trading.

Reporting by Sarah N. Lynch

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