At 8:45 a.m. on a spring day in 2021, a Nomura Holdings trader began a series of complex transactions over five hours on the Osaka Exchange that would earn Japan’s largest securities firm next to nothing but cost it dearly.
Using a tactic called layering, a version of spoofing, the trader offered to sell derivatives linked to more than a billion dollars worth of Japanese government bonds only to subsequently cancel the positions.
As rivals cut their own prices in response, the trader snapped up the cheaper contracts and then resold them.
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