[kasey_junk]

I think you can make an argument that spoofing should be legal (if for no other reason than for how hard it is to enforce). But if you are going to do that, you need to also require uniquely identifying information on the orders in the book as well. This way the market itself can accurately assign a value to the likelihood of being able to actually trade with a counterparty.

If an order comes from an entity with a reputation and history of yanking the order before anyone is able to trade with it, then the other participants in the market can accurately price based on that information.

But the current status quo of letting orders be anonymous and not punishing spoofing regularly provides a real moral hazard for traders that would otherwise prefer to actually trade the volumes they say they want to.