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by Mike Caswell

The Ontario Securities Commission has found Oasis World Trading Inc., a proprietary day trading firm in Ontario, liable for manipulative activities stemming from traders in China. Oasis allowed those traders to engage in a practice known as spoofing, in which a market participant places orders that it never intends to fill, the OSC has determined. There was a "clear pattern where Oasis Traders were at the top of the book on both sides," the OSC has found.

The OSC's ruling is contained in a decision that the regulator released on Wednesday, July 22. The decision only finds Oasis liable for the trading, and does not include any penalties for the firm. The OSC will determine any fines and bans after a separate hearing (which may not be a brief affair -- the hearings on liability alone required 23 days spread over an eight-month period).

The case arises from hundreds of orders entered by Oasis traders between 2018 and 2020. According to the OSC, the traders were engaged in spoofing, or placing an order on one side of the market designed to induce a favourable price change. They then executed an order on the opposite side of the market. Once the trades were complete, they cancelled the initial orders.

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