Uk Trader Blamed For Flash Crash

[Mr Fox]

I read this article yesterday, which really piqued my interest

http://news.sky.com/story/1469548/uk-trader-arrested-over-wall-st-flash-crash

and if anything, was most perplexed as to how someone could have done this.

Is he being made out to be a scape goat, or is he really to blame.

As for this dynamic layering they speak of, what is it in layman's terms, and what is so illegal about this, and if it was done somewhere like GS, or JPM, where they could put orders in, and cancel them, just because they have the finances behind them to back the orders, would it still be illegal.

Best
John

 

[kalott]

I read this article yesterday, which really piqued my interest

http://news.sky.com/story/1469548/uk-trader-arrested-over-wall-st-flash-crash

and if anything, was most perplexed as to how someone could have done this.

Is he being made out to be a scape goat, or is he really to blame.

As for this dynamic layering they speak of, what is it in layman's terms, and what is so illegal about this, and if it was done somewhere like GS, or JPM, where they could put orders in, and cancel them, just because they have the finances behind them to back the orders, would it still be illegal.

Best
John

"The 37-year-old is facing possible extradition over the allegation he used "dynamic layering" computer software from his modest three-bedroom family home"

"The Commodity Futures Trading Commission also filed parallel civil charges against Sarao on Tuesday, calling him a "very significant player in the market"."

 

[tomorton]

Been illegal for years. Transparency of market is key to continuing investment. Nobody would buy or sell anything if price wasn't genuine expression of actual supply & demand.

Trader deserves to be fined but I'd wish the compliance and enforcement suits that let this happen get 20 years apiece.

 

[Jack o'Clubs]

but what's amazing is that this guy seems to have been spoofing a multi-billion dollar market from a three-bed semi in Hounslow. Smells fishy - much easier for FSA, SEC etc to scare the wits out of and make an example of home traders to get headlines than whales. Unlucky sod (notwithstanding that he was breaking the rules - but its comparable to the police handing out parking tickets rather than catching murderers...).

 

[Mr Fox]

The futures exchange wrote to Sarao on the day of the flash crash, telling him to stop spoofing, and he called them back "and told em to kiss my ass."



Yet no action was taken against him then, and he was allowed to carry on doing the same thing for an additional 5 years, yet no other flash crashes happened in the subsequent 5 years. Makes me think more scape goat, than super villian operating out of the axis of evil epicenter that is Hounslow.

I read they did blame it initially on the firm Waddell and Reed, but they probably have quite a few attorney's, and Mr Sarao does not.

Best
John

 

[tar]

BS , the market especially FX was dropping way ahead during the day ...

 

[alexaherself]

I read they did blame it initially on the firm Waddell and Reed, but they probably have quite a few attorney's, and Mr Sarao does not.

Sounds like he can afford one, anyway, if he made over $800,000 just on that one day and has been doing it for another 5 years after that, too? :|

 

[Jack o'Clubs]

Sounds like he can afford one, anyway, if he made over $800,000 just on that one day and has been doing it for another 5 years after that, too? :|

a 37 year old living with mum and dad in that house? Hmmm... He'd be incapable of trading if he'd spent it all on coke, booze and hookers. I look forward to the details of this story coming out because at the moment, it doesn't ring very true.

 

[Splitlink]

I was involved in a thread, a few days ago, in which I said that the market was manipulated. This case hit the papers because of the magnitude of it.

However, manipulation goes on, on a lower scale, every day of the week somewhere but , because it is of lesser importance, it does not get the press coverage. A lot of retail investors get creamed, though, often without knowing it or, if they do complain they get a shrug pf the shoulders and a commwnt "That's trading"!

 

[Mr Fox]

I was involved in a thread, a few days ago, in which I said that the market was manipulated. This case hit the papers because of the magnitude of it.

However, manipulation goes on, on a lower scale, every day of the week somewhere but , because it is of lesser importance, it does not get the press coverage. A lot of retail investors get creamed, though, often without knowing it or, if they do complain they get a shrug pf the shoulders and a commwnt "That's trading"!

I agree Splitlink, everything is manipulated IMHO when it comes to the markets, but there's also a lot of people shouting conspiracy theory this, and conspiracy theory that, when something goes against them.

The bottom line is, good money is being made from the markets as a home/retail trader, and most folk need to stop wasting their time sweating the small stuff, and spend the time wisely to educate themselves, 10,000hrs etc, but I guess some folk want easy money, but don't want to work hard.

Best
John

 

[MGuru]

This is part of the distraction tactic that plays out in Wall St, where big fish swim off and small-time mugs get dragged through the press. When there is a revolving door between the big banks and the regulators there will never be justice. It's highly ironic that Jon Corzine announces a new hedge fund just a day before some nobody gets arrested for apparently crashing the world's largest stock market from a semi-detached in England and faces years in jail. The SAC case, the Kerviel case... we're always told that risk departments new nothing of the trades. Regulators and lawyers are part of the scam.

 

[Splitlink]

This is part of the distraction tactic that plays out in Wall St, where big fish swim off and small-time mugs get dragged through the press. When there is a revolving door between the big banks and the regulators there will never be justice. It's highly ironic that Jon Corzine announces a new hedge fund just a day before some nobody gets arrested for apparently crashing the world's largest stock market from a semi-detached in England and faces years in jail. The SAC case, the Kerviel case... we're always told that risk departments new nothing of the trades. Regulators and lawyers are part of the scam.

He hasn't been convicted, it's true, but he is supposed to have made about 30 million out of it. If he manipulated the markets then I don't have any sympathy for him. Whoever else is involved is another matter and I hope that they get caught.

 

[Jessi_trader]

Stock market is always been place of tricks and smartness...cunning and selfish....since the birth of market...

What George soros did to GBP, was that ethically correct? What MM do everyday?

As long as regulations are not breached and you find loopholes you are fine and you will be regarded as smart trader..thats how market is.

 

[MGuru]

http://www.zerohedge.com/news/2015-...ating-spoofing-taking-place-e-mini-just-today

 

[MGuru]

Stock market is always been place of tricks and smartness...cunning and selfish....since the birth of market...

What George soros did to GBP, was that ethically correct? What MM do everyday?

As long as regulations are not breached and you find loopholes you are fine and you will be regarded as smart trader..thats how market is.

I believe that too. There's no need for them to drag this guy through the court and give him 20-40 years. His orders didn't cause a crash in all markets from S&P to GBP/JPY.

 

[Jessi_trader]

I believe that too. There's no need for them to drag this guy through the court and give him 20-40 years. His orders didn't cause a crash in all markets from S&P to GBP/JPY.

Placing sell Orders and taking off the shelves is not a crime everyone knows that, they are trying to frame Dodd Frank and size related regulations....

Placing orders and taking off thats what all MM and pit players do....

 

[Jessi_trader]

It will be interesting to see what charges they are framing...

 

[tar]

Placing sell Orders and taking off the shelves is not a crime everyone knows that, they are trying to frame Dodd Frank and size related regulations....

Placing orders and taking off thats what all MM and pit players do....

Not true , check message-to-fill ratio ....

 

[Splitlink]

If he did not commit any offences, then I don't know why we are spending time and space talking about him unless it is to close certain loopholes that allow traders to do what he did.

 

[pennycapitalist]

When you think about all the manipulation, it seems impossible for a trader to make money. Most do not and that is understandable. Still, some find a way to make a little. I guess it is a question of who has the sharpest edge. Everybody manipulates in some fashion. What is fair; what is not?