UK 'flash crash' trader pleads guilty

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chufinora
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UK 'flash crash' trader pleads guilty

Post by chufinora »

Something doesn't smell right about this story http://www.bbc.co.uk/news/business-37932250

So a 31 year old guy living with his parents in Hounslow (West London) is accused of causing 1000 point fall in the Dow Jones in 2010. The US extradited him last month. From the link:-

"US authorities say he manipulated the market by "spoofing" over a five-year period, contributing to market instability that led to a brief 1,000-point fall on the Dow Jones index in New York.

Spoofing is the practice of placing large orders before cancelling or changing them, allowing traders to buy or sell at a profit."

Isn't that what High Frequency Trading companies do every day?
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ghariton
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Re: UK 'flash crash' trader pleads guilty

Post by ghariton »

chufinora wrote:Spoofing is the practice of placing large orders before cancelling or changing them, allowing traders to buy or sell at a profit."

Isn't that what High Frequency Trading companies do every day?
Maybe, but not legally any more. The practice was made illegal by the Dodd-Frank Act after 2010. Part of the reform of financial markets, waking regulators from their deep slumber.

George
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