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Illustration: Sarah Grillo/Axios

Traders always aspire to "best execution" — if they're buying or selling a certain asset in the market, they want to get the best possible price. The problem is that high frequency traders (HFTs) make that extremely difficult.

Why it matters: One time-honored (yet illegal) tool for trying to outwit the HFTs is "spoofing." That's where a trader enters a series of fake orders that she has no intention of filling, to fool the HFTs about the supply and demand in the market.

Driving the news: JPMorgan has been fined $920 million for spoofing in commodity markets and Treasury bonds.

  • The CFTC, the lead agency levying the fine, calculated a curiously specific $172,034,790 as the amount that JPMorgan made from the spoofing, along with an equally specific "$311,737,008 in market losses." No indication was made of how those sums were arrived at.
  • The fine includes "restitution" of $205,992,102, to go into a "JPM Victim Compensation Settlement Fund." It's unclear who will ultimately receive that money, but it is certain to be sophisticated institutional investors who traded willingly at a given price.

Reality check: Spoofing might sometimes feel like a victimless crime, but it does deter institutions from trading, and therefore reduces liquidity and price discovery.

The bottom line: This fine is deliberately large to deter any other institutions from trying something similar. But so long as the HFT sharks are infesting the market waters, the big institutions are still going to be hesitant to swim freely.

Go deeper

Kaine, Collins' censure resolution seeks to bar Trump from holding office again

Sen. Tim Kaine (center) and Sen. Susan Collins (right). Photo: Andrew Harnik/Pool via Getty Images

Sens. Tim Kaine (D-Va.) and Susan Collins (R-Maine) are forging ahead with a draft proposal to censure former President Trump, and are considering introducing the resolution on the Senate floor next week.

Why it matters: Senators are looking for a way to condemn Trump on the record as it becomes increasingly unlikely Democrats will obtain the 17 Republican votes needed to gain a conviction, Axios Alayna Treene writes. "I think it’s important for the Senate's leadership to understand that there are alternatives," Kaine told CNN on Wednesday.

Stark reminder for America's corporate leaders

Rosalind "Roz" Brewer is about to become only the second Black woman to permanently lead a Fortune 500 company. She starts as Walgreens CEO on March 15.

Why it matters: It's a stark reminder of how far corporate America's top decision-makers have to go during an unprecedented push by politicians, employees and even a stock exchange to diversify their top ranks.

Ina Fried, author of Login
Updated 3 hours ago - Technology

Apple's quarterly sales top $100 billion for first time

Credit: Apple

Spurred by strong sales of the latest iPhones, Apple reported it took in a record $111 billion in revenue for the three months ended Dec. 31, as the company crushed expectations.

Why it matters: The move showed even a pandemic didn't dull demand for Apple's latest smartphones.