# Flash Crash - Trader Arrested...!?!



## avion (23 April 2015)

http://www.nytimes.com/2015/04/22/b...lation-that-led-to-2010-flash-crash.html?_r=1

Are these guys nuts, every HF outfit operates on similar principle. They will have to arrest all of them if they proceed with this... Nuts, really.


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## banco (23 April 2015)

*Re: Trader Arrested...!?!*



avion said:


> http://www.nytimes.com/2015/04/22/b...lation-that-led-to-2010-flash-crash.html?_r=1
> 
> Are these guys nuts, every HF outfit operates on similar principle. They will have to arrest all of them if they proceed with this... Nuts, really.




Yeah but he's not an American citizen and isn't a hedge fund boss so in the scheme of things he's a perfect scapegoat.  What does it say about the integrity of US markets if somebody with (in the scheme of things) not a great deal of money and some fairly crude software can manipulate the US futures markets?


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## pixel (23 April 2015)

*Re: Trader Arrested...!?!*



banco said:


> Yeah but he's not an American citizen and isn't a hedge fund boss so in the scheme of things he's a perfect scapegoat.  What does it say about the integrity of US markets if somebody with (in the scheme of things) not a great deal of money and some fairly crude software can manipulate the US futures markets?




Let's hope his $40M afford him a shrewd lawyer that exposes the hedgies with *their *HFT computers on the floor right next to each other on the Exchange floors. Sure, they do the same thing on a much larger scale, byt nobody bothers to analyse Honest Joe from God's Own Country.


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## skc (23 April 2015)

*Re: Trader Arrested...!?!*



banco said:


> Yeah but he's not an American citizen and isn't a hedge fund boss so in the scheme of things he's a* perfect scapegoat*.  What does it say about the integrity of US markets if somebody with (in the scheme of things) not a great deal of money and some fairly crude software can manipulate the US futures markets?




Hard not to agree with that... it just feels ridiculous.


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## banco (23 April 2015)

*Re: Trader Arrested...!?!*



pixel said:


> Let's hope his $40M afford him a shrewd lawyer that exposes the hedgies with *their *HFT computers on the floor right next to each other on the Exchange floors. Sure, they do the same thing on a much larger scale, byt nobody bothers to analyse Honest Joe from God's Own Country.




I don't like his chances. Plus the US justice system is so draconian in terms of sentences that he probably has a choice between taking a plea for 8 years or facing 20 years in jail.


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## tech/a (23 April 2015)

*Re: Trader Arrested...!?!*

Nah
He'll turn states witness and dob us all in.
Bastard!


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## avion (26 April 2015)

*Re: Trader Arrested...!?!*

Some follow up articles:

http://finance.yahoo.com/news/woking-wall-st-uk-day-142253933.html


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## avion (27 April 2015)

*Re: Trader Arrested...!?!*

Gold:


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## DaveDaGr8 (27 April 2015)

*Re: Trader Arrested...!?!*

He might as well have robbed a bank. At least then he could have stashed some of the money and he'd be out of jail to use it. This guy will never see the light of day again and if he does get out, will never be allowed to open a bank account ever again.

Maybe he'll make some cash on the movie rights tho


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## avion (27 April 2015)

*Re: Trader Arrested...!?!*

I reckon he will be free, the guy did nothing wrong. Prosecution does not have a case. This is just a blatant witch hunt, a poor attempt to find a scapegoat as noted earlier. They have surely opened up a can of worms. I am looking forward to fallout from all this...


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## prawn_86 (28 April 2015)

I have edited this title slightly in order to generate more searchability


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## So_Cynical (28 April 2015)

Just started reading a newish book - Flash boys - covers some of the allegations in the email...makes it much more believable for me, the conspiracy theory part of it. 

http://en.wikipedia.org/wiki/Flash_Boys


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## avion (28 April 2015)

This fellow trader has nothing to do with HF trading. Whilst high volume, he is trading discretionary. I/we can only aspire to be even remotely close as good as he is.


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## pixel (28 April 2015)

*Re: Trader Arrested...!?!*



avion said:


> I reckon he will be free, the guy did nothing wrong. Prosecution does not have a case. This is just a blatant witch hunt, a poor attempt to find a scapegoat as noted earlier. They have surely opened up a can of worms. I am looking forward to fallout from all this...




That's what Julian Assange thought as well.
Maybe there's a friendly Embassy that has a spare room for Nav Sarao too.


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## avion (28 April 2015)

*Re: Trader Arrested...!?!*



pixel said:


> That's what Julian Assange thought as well.
> Maybe there's a friendly Embassy that has a spare room for Nav Sarao too.




Ha, ha, i think you have a point pixel. Free world is not so free after all...


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## Knobby22 (28 April 2015)

Great Article from Bronte Capital -John Hempton.  A great Aussie investor but you need 500,000 min cash to invest with him. Great blog though, worth reading. http://brontecapital.blogspot.com.au/

His comments follow (read the whole article on the blog:

_Making spoofing illegal thus increases the profits of front running computers - meaning more front running computers.

 Now alas when I buy a real order in market I have to pay my due to the front running computers - which comes at a real cost to me - a real investor - and to my clients. This is a real cost to real investment in the capital market.

 I would prefer the front running computers go away - and the best way for that to happen is to allow spoofing. Spoofing makes the world unsafe for front-running high frequency traders.

So what have the regulators done. They have arrested a kid who is spoofing the market with a few thousand e-mini contracts and hence taken money from the front-running computers whose real goal is to rip you (real investors) off. They have made the world safe for the conventional high-frequency traders at a real cost to the investing public.


They were helped out by an industry whistle-blower.

 In other words they did it with the help of an industry participant: someone who runs the front-running computers designed to rip-you off.

 The Department of Justice has been played into bringing the full force of the US legal system onto an irrelevant trader - just to make the world safer for the real rip-off merchants.

 And their case looks plain silly.

 As for the kid - Navinder Singh Sarao - he isn't a criminal. He is a hero. He is the sort of guy who makes the market safe for ordinary investors.

 Here is to hoping the English judge treats the extradition request with the contempt it deserves_.


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## avion (28 April 2015)

Knobby22 said:


> As for the kid - Navinder Singh Sarao - he isn't a criminal. He is a hero.


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## VSntchr (4 September 2015)

http://www.afr.com/markets/equity-m...cted-by-us-federal-grand-jury-20150903-gjetk1

Update on this situation today in the AFR.
Can't believe this! If every trader who has ever put a dummy order in deserves to be indicted - the market is going to get *VERY *thin!!!!


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## avion (4 September 2015)

All i can think of is that we are all scr***d in the long run. This is beyond ridiculous. This is state terrorism...

I am so upset i can't trade...


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## tech/a (4 September 2015)

Love it.

I see countless Posts on nasty market manipulation tactics
then when one gets done---screams of state terrorism.

fark me.


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## avion (4 September 2015)

tech/a said:


> Love it.
> 
> I see countless Posts on nasty market manipulation tactics
> then when one gets done---screams of state terrorism.
> ...





Because that's what it is Tech. They never get it 'right'. Just think who the real villain here is. The real manipulators (read HFT) get away while they nab small time player. It stinks all the way to the moon and back. Read zerohedge, they nailed it.


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## tech/a (4 September 2015)

avion said:


> Because that's what it is Tech. They never get it 'right'. Just think who the real villain here is. The real manipulators (read HFT) get away while they nab small time player. It stinks all the way to the moon and back. Read zerohedge, they nailed it.




Nah

They got it right.

Hiring programmers to programme a method which deliberately spoofs the market.
Remember many lost 1000s---this is calculated and fraudulent.

You suggest they do nothing?


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## sinner (4 September 2015)

tech/a said:


> Love it.
> 
> I see countless Posts on nasty market manipulation tactics
> then when one gets done---screams of state terrorism.
> ...




He hasn't been "done", he hasn't even stood trial, therefore innocent until proven guilty.

Proving guilt beyond a reasonable doubt will involve evidence. Unfortunately, as with other similar cases related to hacking for example, it will be difficult to find a jury of this mans peers, since most people have not even the remotest of clue about the subject matter at hand. Same goes for the judge. The probability of an unfair conviction is high.

If you read the above letter from the accused, you might be forgiven for mistaking him for Trembling Hand. 

I was trading USDJPY intraday on the night of the flash crash. This is a FX pair that has billions in notional waiting in the order book, normally about $10bn in flow pushes the price less than 1 pip. Take a look at the chart to see how far it moved on that night.

If some *foreign, individual, trading S&P500 Eminis* like that can spike volatility in the entire global financial complex then he is definitely not the most criminal person in the room. Occams Razor dictates that the probability of valid evidence against this guy is low. 

As banco pointed out months ago:


> Yeah but he's not an American citizen and isn't a hedge fund boss so in the scheme of things he's a perfect scapegoat. What does it say about the integrity of US markets if somebody with (in the scheme of things) not a great deal of money and some fairly crude software can manipulate the US futures markets?


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## sinner (4 September 2015)

tech/a said:


> Nah
> 
> They got it right.




lololol, tech is judge jury and executioner. 



> Hiring programmers to programme a method which deliberately spoofs the market.
> Remember many lost 1000s---this is calculated and fraudulent.
> 
> You suggest they do nothing?




The suggestion being that if they are going to pretend to be serious about "the 1000s many lost", perhaps they start at the top of the pyramid of egregious financial crimes and work their way down, with this guy being at the very very bottom of the pyramid.


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## avion (4 September 2015)

'they' = was referring to SEC

Saraos 'spoofing' mounted to few programmed functions (Join/Snap/Ice as per his letter)! I wish i was big enough to 'spoof' market like that!!

Let's just hope he gets off so we can put this behind us and focus more on outplaying the real thief's.


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## avion (4 September 2015)

tech/a said:


> Nah
> 
> They got it right.
> 
> ...




Hahaha... just got your sarcasm Tech. Sorry i am too distracted atm.


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## avion (11 September 2015)

http://www.zerohedge.com/news/2015-09-10/we-now-know-what-happened-612-am-morning

'In summary: what we do know: a nearly 1% move up and down in the S&P due to blatan - and illegal - spoofing manipulation; what we don't know: the identity of the spoofer.

What is certain: if the culprit is a central bank or one of its trading agents like Citadel, the CFTC will never follow up. If it is some Indian living in his parents' basement in a London suburb, you can run but you can't hide.'


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