What is "spoofing"

n. 1 The action of the verb '''to spoof'''. 2 (context computing English) A method of attacking a computer program, in which the program is modified so as to appear to be working normally when in reality it has been modified with the purpose to circumvent security mechanisms. 3 (context computing English) phishing. vb. (present participle of spoof English)

Spoofing, or decoying, is the practice of inundating online networks with bogus or incomplete files of the same name in an effort to reduce copyright infringement on file sharing networks. Cary Sherman, president of the Recording Industry Association of America (RIAA), calls spoofing "an appropriate response to the problem of peer-to-peer piracy," and "a self-help measure that is completely lawful."

Spoofing is a disruptive algorithmic trading entity employed by traders to outpace other market participants and to manipulate commodity markets. Spoofers feign interest in trading futures, stocks and other products in financial markets creating an illusion of exchange pessimism in the futures market when many offers are being cancelled or withdrawn, or false optimism or demand when many offers are being placed in bad faith. Spoofers bid or offer with intent to cancel before the orders are filled. The flurry of activity around the buy or sell orders is intended to attract other high-frequency traders (HFT) to induce a particular market reaction such as manipulating the market price of a security. Spoofing can be a factor in the rise and fall of the price of shares and can be very profitable to the spoofer who can time buying and selling based on this manipulation. Under the 2010 Dodd-Frank Act spoofing is defined as "the illegal practice of bidding or offering with intent to cancel before execution."Spoofing can be used with layering algorithms and front-running, activities which are also illegal. High-frequency trading, the primary form of algorithmic trading used in financial markets is very profitable as it deals in high volumes of transactions. The five-year delay in arresting the lone spoofer, Navinder Singh Sarao, accused of exacerbating the 2010 Flash Crash—one of the most turbulent periods in the history of financial markets— has placed the self-regulatory bodies such as the Commodity Futures Trading Commission (CFTC) and Chicago Mercantile Exchange & Chicago Board of Trade under scrutiny. The CME was described as being in a "massively conflicted" position as they make huge profits from the HFT and algorithmic trading.