Spoofing

A few months ago, Layla bought 1,000 shares of IMHO, Inc. stock. Since then, it hasn’t really gone up the way she thought it would, so she’s decided to take matters into her own hands. She’s going to engage in a little “spoofing,” a form of stock market manipulation in which an investor places a big order in an effort to drive up the company’s share price and trade activity, but then immediately cancels the order before it actually fills.

Once all the hype Layla’s created bumps up the value of her original 1,000 shares, she’s going to sell them at a profit before everyone realizes what’s going on and the price drops back down. She feels like this is a surefire way to increase the value of her portfolio, but it might also be a surefire way to get herself a nice criminal record. That’s because spoofing is illegal. And...word to the wise: it’s tough to enjoy our money from prison. So maybe spoofing isn’t the best way to enhance our portfolio.

The word “spoofing” also has another popular definition, and we’d be remiss if we didn’t mention it here. Outside of the stock market, “spoofing” refers to pretending to be someone else in an effort to access people’s personal information. This goes beyond catfishing. Spoofers will often pretend to be a legit business, a person we know, or even a government enterprise, and then they’ll send out texts, emails, or...whatevs...trying to convince innocent people to share stuff like their SSN, account info, passwords, etc. Spoofing is a scam, it’s shady, and, like our previous spoofing example, it’s illegal.

We’ve all probably heard this a million times, but it bears repeating: we shouldn’t give out any personal info to anyone ever without verifying that (1) they are who they say they are, (2) the info is needed for legit purposes, and (3) the info will be protected.