Jin Yi Lim, a former Barclays general securities representative, has agreed to a fine as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

From February 2022 through June 2022, Lim, while associated with Barclays, engaged in 32 instances of “spoofing,” a type of fraudulent trading, in U.S. Treasury securities.

Therefore, Lim violated FINRA Rule 2010 by acting in contravention of Section 17(a)(3) of the Securities Act of 1933 and is suspended 12 months and fined $17,500.

Lim, while associated with Barclays and a USD Rates Desk trader, traded U.S. Treasury securities to facilitate customer order flow, either after receiving an order from a customer, or to build inventory in expectation of such orders. Lim maintained a larger inventory and traded more in shorter-maturity U.S. Treasury securities, including 5- and 10-year Notes, than in longer-maturity securities.

From February 2022 through June 2022, Lim engaged in 32 instances of spoofing.

In each instance, Lim entered a larger, fully displayed order on one side of the market (generally for $25 or $50 million) in 5- or 10-year Notes with intent to cancel that order at the time he placed it. Lim generally placed each larger, fully displayed order at the inside price on the electronic trading platform where most of the order’s quantity was routed.

Simultaneously, Lim had a smaller, iceberg order on the opposite side of the market in the same product, also generally at the inside price. Other market participants would react to Lim’s larger, fully displayed order by (1) moving their resting order prices up or down, (2) withdrawing any orders resting opposite the larger, fully displayed order, or (3) placing aggressive orders to execute against orders resting opposite the larger, fully displayed order—all making execution of Lim’s smaller resting order more likely.

In 15 of the 32 instances, Lim received executions on his smaller, iceberg orders while his larger, fully displayed orders were in the market. In each of the 32 instances, because Lim intended to cancel each larger, fully displayed order at the time he placed it, these orders falsely signaled a shift in buy or sell interest through their impact on the stack.

Lim has consented to the imposition of the following sanctions:

• a 12-month suspension from associating with any FINRA member in all capacities and
• a $17,500 fine.