UT (Tax & Chancery) UT-2022-000134 UT-2022-000135 UT-2022-000137 - [2025] UKUT 00214 (TCC)

The Traders referred to the fact that in some Instances the price of the Large Order was amended after the Small Order had traded. Mr Kasapis’s evidence was that these price amendments demonstrated that the Large Orders were independent from the Small Orders, as there would be no reason to adjust the Large Order and keep it live beyond the Small Order having traded if the purpose of the Large Order was to cause the Small Order to trade.

Mr Shivji submitted that these Instances were not illuminating – the market was volatile, the Large Orders were kept away from the touch, and keeping the Large Orders (rather than cancelling them) did not necessarily show that they were genuine.

The Instances identified by Mr Kasapis are set out below. The first three columns are produced from the table in Mr Kasapis’s report. The fourth column has been calculated and added to the table by the Tribunal.

The possible significance (or otherwise) of these amendments was put to both of the experts during cross-examination:

In closing, Mr Shivji submitted that the Large Orders may have remained live and been kept away from the touch whilst the Traders considered whether to place further Small Orders on the opposite side; and referred to Mr Kasapis having recognised that a variant of spoofing is to place larger orders and manipulate the touch, and then place other orders afterwards. However, we consider that such possibilities are speculative, were not pleaded by the Authority and we were not taken to any supporting evidence.

Looking at the period of time between the Small Order being filled and the price of the Large Order being amended in the six Instances identified by Mr Kasapis, we agree with Mr Creaturo that in at least three of these (F32, F90 and F170) it is likely that the price amendment was being made at effectively the same time as the Small Order filled.

All three of Mr Urra’s Large Orders were cancelled within three seconds of the price amendments being made (and within 3.5 seconds of the Small Order being filled).

Of the six Instances identified, it is F90 and F161 which are potentially the most interesting; both of these were Large Orders placed by Mr Lopez, and although in F90 the price amendment was in the same second as the Small Order filled, both of these Large Orders were live for several seconds after the price was amended. The Large Order in F90 had been placed three ticks from the touch, and the amendment was to move it closer, to two ticks from the touch. The Large Order in F161 had been placed three ticks from the touch, and during the Instance its price was improved so it was two ticks away; the amendment after the Small Order filled was to reduce the price of the buy-side order so it was three ticks away, and it was cancelled when the market started to move towards the order. It is not therefore correct that the Large Order was amended away from the touch in both of these two Instances; however, we do agree that based on volumes there was no immediate likelihood of these Large Orders trading.