SEC Busts HFT Firms for manipulation of Stock market

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SEC Busts HFT Firms for manipulation of Stock market

Postby Indaswamp » Fri Apr 04, 2014 2:08 pm

SEC Busts HFT Firms For "Tricking People Into Trading At Artificial Prices"

Of course, another name for "layering" is "spoofing" which is precisely the term that the SEC used today when it announced that it charged the owner of a New Jersey-based trading firm and several other defendants "in a scheme to manipulate the market through an illegal practice known as "spoofing."

From Reuters:

The Securities and Exchange Commission said that Joseph Dondero, a co-owner of Visionary Trading LLC, as well as several other owners and a New York-based brokerage firm called Lightspeed Trading LLC will collectively pay $3 million to settle the charges. Spoofing involves a trader placing orders without the intention of having them executed, a strategy that tricks people into buying or selling stock at artificial prices. Reuters reported earlier this week that the FBI is also investigating the practice of spoofing more broadly in a probe into high-speed trading.


And to all those who mock Zero Hedge-they were on top of this from the get go....
So is this getting clearer now? Yes: precisely those same "strategies" so pervasively used by HFTs, because Virtu didn't have a 99.9% successful trading history in the past four years from "providing liquidity", and which the SEC had no problems condoning as long as the market was going higher, are suddenly being frowned upon, and HFTs are starting to finally feel the wrath of the regulator. But that will be nothing compared to the wrath of the general public, which just like the CEO of BATS has zero understanding of how HFT actually works, when the upcoming market crash is blamed not on the Fed but on 25 year old math PhDs who "trade" and whose lobbying cash at the SEC no longer works now that almighty Goldman has finally turned its back on the high freaks.

Just as we predicted would happen.
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Re: SEC Busts HFT Firms for manipulation of Stock market

Postby ScaupHunter » Fri Apr 04, 2014 2:22 pm

Where is Dude with his cries of CONSPIRACY! CONSPIRACY!
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Re: SEC Busts HFT Firms for manipulation of Stock market

Postby Indaswamp » Fri Apr 04, 2014 2:24 pm

ScaupHunter wrote:Where is Dude with his cries of CONSPIRACY! CONSPIRACY!

How many conspiracies have I posted that become conspiracy fact? I have lost count....
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Re: SEC Busts HFT Firms for manipulation of Stock market

Postby Indaswamp » Sun Apr 06, 2014 10:17 pm

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Re: SEC Busts HFT Firms for manipulation of Stock market

Postby jaysweet3 » Mon Apr 07, 2014 6:20 am

I remember you posting a YouTube video of spoofing. Might have been a couple years ago.

Is the sec going to clean up this practice, or are these couple of firms just sacrificial lambs?
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Re: SEC Busts HFT Firms for manipulation of Stock market

Postby Indaswamp » Mon Apr 07, 2014 9:19 am

jaysweet3 wrote:I remember you posting a YouTube video of spoofing. Might have been a couple years ago.

Is the sec going to clean up this practice, or are these couple of firms just sacrificial lambs?

If they clean it up, the crash will make Lehman look like a bump in the road. My guess is that they crack down on some aspects of HFT's but leave the bulk in tact providing income to exchanges and phantom liquidity to the market.

Here is why I say "Phantom liquidity":
High Frequency Trading: All You Need To Know

Image


click the image to view full screen or do so at the link provided...
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Re: SEC Busts HFT Firms for manipulation of Stock market

Postby Indaswamp » Mon Apr 07, 2014 2:26 pm

Here ya go Jay...
http://www.zerohedge.com/contributed/2014-04-07/are-we-heading-another-1987-style-crash

Anyone here remember what caused the 1987 crash?
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Re: SEC Busts HFT Firms for manipulation of Stock market

Postby Indaswamp » Mon Apr 07, 2014 2:27 pm

I am reminded of the quote, "If you are sitting at a card game and you don't know who the patsy is; guess what!"
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Re: SEC Busts HFT Firms for manipulation of Stock market

Postby aunt betty » Mon Apr 07, 2014 3:04 pm

This stock market stuff is way out of my league. I find it ironic that the CBS story about stock market scandal came out the same day (I think) and wasn't exactly related. The CBS story is about New Jersey Brokerage Companies that have direct connection to the stock market. They intercept orders before they get placed and bid stocks up with computers so they can sell at profits. Very complicated.

This is the story.

http://www.cbsnews.com/news/is-the-us-s ... et-rigged/
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Re: SEC Busts HFT Firms for manipulation of Stock market

Postby Indaswamp » Mon Apr 07, 2014 8:41 pm

aunt betty wrote:This stock market stuff is way out of my league. I find it ironic that the CBS story about stock market scandal came out the same day (I think) and wasn't exactly related. The CBS story is about New Jersey Brokerage Companies that have direct connection to the stock market. They intercept orders before they get placed and bid stocks up with computers so they can sell at profits. Very complicated.

This is the story.

http://www.cbsnews.com/news/is-the-us-s ... et-rigged/

co-location of computers AB... they buy space at the exchanges to see the stock flow orders before they are executed and then beat slower market participants to those orders, mark them up, then sell them to fill those orders. Basically skimming pennies of trasactions and they do this millions of times a day. There are other strategies used like fake orders to drive stocks up which are them pulled before they are executed. 90% or more of orders sent by HTF computers are never executed-they are pulled before others get to act on them.
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Re: SEC Busts HFT Firms for manipulation of Stock market

Postby Indaswamp » Mon Apr 07, 2014 9:02 pm

The Father Of High Speed Trading Speaks: "The Market We Created Is A Casino; A Complete Mess; A Rigged Game"

"It is not so much anymore that the public does not trust their brokers. They do not trust the markets, the exchanges, or the regulators either. And why should they, given our showing the past few years? To the public the financial markets may increasingly seem like a casino, except that the casino is more transparent and simpler to understand."
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Re: SEC Busts HFT Firms for manipulation of Stock market

Postby Indaswamp » Mon Apr 07, 2014 10:04 pm

The Cajun 7 Course Meal; 1 lb. of boudin and a six pack of Abita beer.

Save the Marsh, Eat a Nutria!

Never fart in your waders, it'll give you WORTS.
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Re: SEC Busts HFT Firms for manipulation of Stock market

Postby Indaswamp » Sun Apr 13, 2014 9:03 pm

The Cajun 7 Course Meal; 1 lb. of boudin and a six pack of Abita beer.

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