Open E-Cry and Velocity Affected by Fictious Trades

Are you arguing just for the sake of argument? This is how it was done. The scammer went into a deferred, illiquid back month (actually they traded a slew of back months going as far as 3/2015) where the Velocity account was able to enter a "high ball" offer. The OEC account then bought the Velocity offer. I presume each account either offset in the front month, creating a spread or traded against each other again, only this time on the "bid."


Globex being an "open and transparent regulated exchange" has absolutely nothing to do with it. Just because it's more difficult doing this on Globex, as opposed to a phantom OTC transaction-is of no material impact to the charge of "pre-arranged." Traders have washed losses (for tax reasons) in back month futures and illiquid ITM option strikes, for decades.

And how is this the CME's fault? You sound illogical. For starters, you can't have a pre-arranged trade without a trade actually occurring. What's the CME supposed to do? On the fly, decide to "shut down" Ruble futures? Without an investigation? Without knowing, if in fact, these trades were prearranged?

As far as position limits: There's no evidence that these trades resulted in a "net" 19,000 contracts being "open" and as you know, or should know, "limits" are "unlimited" during the session itself.

Quote from PocketChange:

Based on this same logic any trading manager account or sub accounts could also be construed as pre-arranged trades. ie.. long / short account controlled by the same CTA. In fact they even have the ability to post allocate trades.

Now if he had bought and sold off the exchange under a private agreement I would agree. These transactions flowed through an open and transparent regulated exchange. CME/OEC have market surveillance and should have intervened instantly.

OEC and CME were negligent.. you don't get relief from any court for stupidity.

19000 contracts is not the problem either:

60A01.E. Position Limits

No person shall own or control a combination of Russian ruble options and underlying futures contracts that exceeds 10,000 futures-equivalent contracts net on the same side of the market in all contract months combined. In addition, no person shall own or control a combination of options and underlying futures contracts that exceeds 2000 futures-equivalent contracts in the lead month on or after the day one week prior to the underlying futures termination of trading day.

For the purpose of this rule, the futures equivalent of an option contract is 1 times the previous business day's IOM risk factor for the option series. Also for purposes of this rule, a long call option, a short put option and a long underlying futures contract are on the same side of the market; similarly, a short call option, a long put option and a short underlying futures contract are on the same side of the market.

260A01.F. Accumulation of Positions

For the purposes of this rule, the positions of all accounts directly or indirectly owned or controlled by a person or persons, and the positions of all accounts of a person or persons acting pursuant to an expressed or implied agreement or understanding, and the positions of all accounts in which a person or persons have a proprietary or beneficial interest, shall be accumulated.
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Obviously they worked the systems... I'm not arguing that point.

I don't believe the two accounts were commonly owned or controlled.

No doubt they had some sort of arrangement based on capturing 50% of the order flow... The paper trail would provide a preponderance of evidence. Injunctive relief is a rare remedy especially when an award for money damages can make you whole.

My arguments leans more in the area of due process.. innocent until proven guilty. OEC was on the hook and took action to protect their interest.

My concern is for the alleged unidentified "confederate" whose velocity account was seized. This party will now sign or say anything they want him to say to get out of litigation.
 
Quote from optionsgeek:

@PocketChange: The CTFC complaint alleges
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He's not worth arguing with. Read his post "Based on this same logic..." if you need to be convinced.
 
Quote from HelloDollar:

Perhaps you're confusing Griffin for Spike? Griffin was a century old CBOT firm taken down by a London trader who used his own great scam-he executed trades through a "third party", via a "give-up" agreement. It took Chicago customers of Griffin a few weeks to receive their funds.
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Yeah, that's the firm. Sub Griffin for Peregrine.
 
Wow!

OK i get it now same guy... The original courthouse link stated an unnamed accomplice.

" Upon discovering the software error, Yunusov and an unnamed accomplice made more than 19,000 trades in a single day - June 4 - booking the losses on Yunusov's account, while hiding his gains in his confederate's account, according to the complaint."

Quote from optionsgeek:

@PocketChange: The CTFC complaint alleges (and the subsequent judicial order appears to confirm) common ownership of the two accounts by a single named individual. It even mentions that a single IP address was traced as the source for near simultaneous order entry into both accounts:

http://cftc.gov/ucm/groups/public/@...legalpleading/enfyunusovcomplaint06112010.pdf
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Reading the complaint this guy had to have quite a setup. OEC API, X-Trader API. 80,000 undetected rt's across approx 15 different contracts in 12 hours. HFT trading algo pushing 2 orders per second from a Russian IP address. A High Tech Virtual Bank Robbery from abroad.

Fascinating read.
 
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