There has been some degree of concern among regulators during the course of this year with regard tohigh speed algorithmic trading and what certain authorities consider to be the disruptive behavior in which certain traders engage by using algorithms to outpace other market participants.

Today, the US Commodity Futures Trading Commission (CFTC) has brought a successful case against two parties, citing them for engaging in what the CFTC considers to be the disruptive process of spoofing. This is a milestone case, as it represents the first time that a trading firm has been prosecuted under the Dodd-Frank Act’s prohibition of spoofing, which is defined under the act as the illegal practice of bidding or offering with intent to cancel before execution.

Britain’s Financial Conduct Authority (FCA) collaborated with the CFTC on this matter, and has also issued a penalty to the same parties.

One of the reasons that algorithmic trading is on the agenda of regulators is that it facilitates positions to be opened and closed at extremely high speeds, using extremely high technology, therefore giving certain traders a distinct advantage over others.

In this particular case, Panther Energy Trading LLC and its Principal Michael J. Coscia utilized a computer algorithm that was designed to illegally place and quickly cancel bids and offers in futures contracts.

The resultant toxic order flow of firms that use algorithms without contravening any laws has resulted in German regulator BaFIN proposing a mandatory delay in trade execution times to prevent disruptions, and go against latency arbitrage by those with quicker systems and complex automated algorithms.

Certain firms, without any encouragement from regulators, are also considering imposing a latency floor in order to absolve them of any such business. EBS recently embarked on such a consideration.

The CFTC’s order against Mr. Coscia and his firm finds that this unlawful activity took place across a broad spectrum of commodities from August 8, 2011 through October 18, 2011 on CME Group’s Globex trading platform.

The CFTC Order requires Panther and Coscia to pay a $1.4 million civil monetary penalty, disgorge $1.4 million in trading profits, and bans Panther and Coscia from trading on any CFTC-registered entity for one year.

According to the Order, Coscia and Panther made money by employing a computer algorithm that was designed to unlawfully place and quickly cancel orders in exchange-traded futures contracts.

For example, Coscia and Panther would place a relatively small order to sell futures that they did want to execute, which they quickly followed with several large buy orders at successively higher prices that they intended to cancel.

By placing the large buy orders, Mr. Coscia and Panther sought to give the market the impression that there was significant buying interest, which suggested that prices would soon rise, raising the likelihood that other market participants would buy from the small order Coscia and Panther were then offering to sell.

Finance ministers from the G20 group of leading nations have formally backed plans to tackle international tax avoidance and evasion.

A statement issued earlier supports the automatic exchange of tax information between countries.

It also backs plans by the Organisation for Economic Cooperation and Development to stop firms moving their profits across borders to avoid taxes.

The OECD said some firms “abuse” current rules to avoid tax.

UK Chancellor George Osborne said the announcement, which came after a two-day G20 meeting in Moscow, was an “important step towards a global tax system that is fair and fit for purpose for the modern economy”.

Last month, the G8 group of leading economies agreed a deal to “fight the scourge of tax evasion”, and nations including the UK, France, Germany, the USA and Australia are taking part in a pilot information exchange scheme.

British Prime Minister David Cameron made the issue a priority for the UK’s presidency of the G8 this year, and Australia has agreed to do the same during its G20 presidency next year.

The OECD said current tax rules, some dating to the 1920s, were created to avoid “double taxation” of companies working in more than one country – but it said they were being abused to allow “double non-taxation”.

BBC business correspondent Joe Lynam said the “bandwagon of clamping down on aggressive tax avoidance” was moving on from developed economies to emerging ones like Brazil and India.

The rules should mean bigger bills for companies which could previously “pit one country off against another in terms of tax”, our correspondent added.

The G20 asked the OECD to come up with a plan to improve tax cooperation, and the finance ministers said they “fully endorse the OECD proposal for a truly global model” of information sharing.

Their statement called on all countries to make automatic information sharing a reality “without further delay”, adding that “capacity-building support” would be provided for poorer nations.

The G20 said the changes should be in place within two years, but our correspondent called that “very ambitious” because hundreds of tax treaties exist between countries and “thousands of amendments” might be needed.

Many multinational firms currently avoid tax – legally – by means including loopholes and tax havens, but the new rules could require them to pay more in the countries where they do business.

Firms including Google, Starbucks, Amazon and Apple have been criticised for the amount of tax they pay.

Earlier this year, MPs attacked Google for routing £3.2bn of UK sales through Dublin and paying little tax as a result.

Starbucks has been questioned for transferring money to a Dutch sister company in royalty payments, though the firm agreed to pay more tax after strong public criticism.

The companies point out that these schemes are legal and they have a duty to shareholders to minimise their tax bills.