Three individuals and two trading companies were charged by the Securities and Exchange Commission with spoofing and engaging in a fraudulent trading scheme to take advantage of certain benefits received by public investors. The individuals are Behruz Afshar, Shahryar Afshar, and Richard Kenny, IV, while the trading companies are Fineline Trading Group LLC and Makino Capital LLC. Under various exchange rules, option orders from public customers must be identified as customer or professional. According to the SEC, orders identified as customer have priority of execution over orders marked professional, and also can earn higher rebates and pay lower fees. The SEC claimed that, from at least December 2010 to December 2012, the Afshars and Mr. Kenny fraudulently represented to Lightspeed Trading LLC, a broker-dealer carrying accounts for Fineline and Makino, that the firms were separately owned by Behruz and Shahryar, respectively, when in fact Behruz had an ownership interest in both companies. This enabled the three individuals to direct most of their trading for each quarter to one of the two companies only, ensuring that the other company qualified as a public customer the following quarter and received public customer benefits. The SEC claimed this acted as a deceit on the relevant exchanges. In addition, the SEC claimed that the respondents engaged in “spoofing”-type conduct on the Nasdaq OMX PHLX exchange in order to receive rebates for providing market liquidity. According to the SEC, respondents would place larger orders on one side of the market that were hidden from public disclosure because of their nature (i.e., all or nothing orders), and small spoofing-type orders on the other side of the market that would improve the prevailing best bid or offer in order to attract orders from other market participants. The SEC claimed this operated as a deceit against the other market participants who joined the fake orders placed by respondents and ended up executing transactions against the larger orders previously placed by respondents on the opposite side of the market. These other market participants ended up paying extra fees for taking liquidity from the marketplace, while the respondents received rebates for providing liquidity. The SEC seeks disgorgement, civil penalties and a cease and desist order from respondents.