UK trader arrested for May 2010 U.S. Stock market flash crash

[sprstpd]

Man I'm so glad that the market is so robust that one individual can cause a flash crash. Now that they've finally arrested the perpetrator, I can rest easy at night. I can also rest easy that HFTs are providing so much liquidity and are so great for the markets and for my trading.

Nothing to see here, move along.

 

[Ghost_of_Blotto]

So, he had a fair amount of capital to work with, although not much when you compare how little it takes to put on an ES to how much it would take to sell SPY.

It isn't just the capital, it is understanding where you can show that size and create the effect you desire. You are always at the mercy of other large participants who can (and will) take your size if you are wrong. If you don't understand the market on a level which 99.995% never achieve you are not going to be doing this successfully.

Nav is a very gifted trader who started trading 1 lot of emini at a trading company in Surrey circa '07 and earned over a million net in his first year or so. People in the know might remember the ear defenders he wore and his fondness for cereal. (he knew how to take a loss as well, and he had them occasionally of course)

I've mixed feelings about this as there is a political agenda against trading and regulatory intent to have the ability to monitor everyone's trading at all times. It has been said over and over again that spoofing will not be tolerated.

People who are politically savvy or who have intelligent advisors have been steering away from this particular hot potato. Several very large spoof traders have taken their ball and gone home because there has been an obvious intent to make a scapegoat in a political prosecution.

It is sad because somebody who is his own man and who became extremely successful in his chosen field is now going to be fed to the lions to satisfy envy and resentment against achievement.

So much genuine fraud goes unpunished and is often uninvestigated. This case comes extremely close to being a victimless "crime".

 

[Pekelo]

At face value, this is total BS. I still have to read the complaint though....

1. Why did it take 5 years to get this guy?
2. They already had an explanation what we haven't bought, so why should I buy this one?
3. If the market is so fragile that a relative small guy with a modified algo can crash it, then maybe it should be crashed more often to make it anti-fragile.
4. Let's assume the guy did have a hand in the crash, and he just went forward as business as usual (not to mention continuing the did) for the next 5 years, not fearing retribution?
5. If he could do it, somebody else also can do it tomorrow, so what counter measures are taken to avoid this in the future??
6. Let's say he knew he can do it, but what did he do to cover his tracks? A crime that leads right back to you is stupidity, not a crime...
7. What is the point of crashing the market if the algo makes money anyway? Why risk killing the market and possible prison if you can make decent money manipulating the market in a safe way? Maybe the algo did it by accident?

 

[lucysparabola]

I really just hate that he is going down for what all the other HFT firms do. Bullshit. Either leave him be or take them all down.

 

[just21]

Nav is a very gifted trader who started trading 1 lot of emini at a trading company in Surrey circa '07 and earned over a million net in his first year or so. People in the know might remember the ear defenders he wore and his fondness for cereal. (he knew how to take a loss as well, and he had them occasionally of course)

Www.futex.co.uk ?

 

[loyek590]

It isn't just the capital, it is understanding where you can show that size and create the effect you desire. You are always at the mercy of other large participants who can (and will) take your size if you are wrong. If you don't understand the market on a level which 99.995% never achieve you are not going to be doing this successfully.

Nav is a very gifted trader who started trading 1 lot of emini at a trading company in Surrey circa '07 and earned over a million net in his first year or so. People in the know might remember the ear defenders he wore and his fondness for cereal. (he knew how to take a loss as well, and he had them occasionally of course)

I've mixed feelings about this as there is a political agenda against trading and regulatory intent to have the ability to monitor everyone's trading at all times and it has been said over and over again that spoofing will not be tolerated. Several very large spoof traders have taken their ball and gone home because there has been an obvious intent to make a scapegoat in a political prosecution.

It is sad because somebody who is his own man and who became extremely successful in his chosen field is now going to be fed to the lions to satisfy envy and resentment against achievement. So much genuine fraud goes unpunished and is often uninvestigated. This case comes extremely close to being a victimless "crime".

my reply was to the poster who assumed he had little capital.

1. If he could make the market go UP 900 points, no one would bother him.

2. Apparently somewhere in the sec or cftc lawbooks is a law against "spoofing." And it can probably be prosecuted with the same discretion that the DOJ uses when prosecuting "insider trading."

 

[Gamer]

I don't get this. One guy gets charged for something that every prop firm and institution up and down the country is doing thousands of time every day?

And spoofing is illegal? Who put these fu(kers in charge? Are they gonna arrest Paul Rotter next?

 

[loyek590]

I don't get this. One guy gets charged for something that every prop firm and institution up and down the country is doing thousands of time every day?

And spoofing is illegal? Who put these fu(kers in charge? Are they gonna arrest Paul Rotter next?

yes, spoofing is illegal. That's what they are trying to nail this guy on. It's a real law on the books.
Now, what it exactly spoofing is, I have no idea, other than I am trying to fool you into thinking I am big. And I'm just a little itty bitty guy.

That's why I say, if I was big, but trying to spoof you to make you think I am small, and the result was the market went up, nobody would complain.

So spoofing in itself is not bad, but it's illegal if it makes the market go down.

 

[i960]

I heard on cnbc that at the time of the crash he was 60% of the market. So, he had a fair amount of capital to work with, although not much when you compare how little it takes to put on an ES to how much it would take to sell SPY.

I don't think this is accurate at all. There's no way an independent was 60% of the market. I think what you or they meant is that they were 60% of the implied *book* at the time. I'm sure if some big fish came along and filled this guy he'd be puking the position immediately.

The thing I like about this is it validates everyone's suspicions about how spoofing orders work and their intent behind it. We've all been collectively observing and dealing with spoofers for a while now so it's good to see someone get punked for it (even if it didn't actually cause the flash crash).

 

[i960]

It is sad because somebody who is his own man and who became extremely successful in his chosen field is now going to be fed to the lions to satisfy envy and resentment against achievement.

Even though I think spoofing is total BS and a pain to deal with, I agree with this.

You'll notice not one time has Goldman Sachs ever been *arrested* for criminal behavior related to market manipulation. Why? They're part of the club - heck they *are* the club.

This is what bothers me most about this situation. He's been used as an example while all the big boy psychopaths get away with murder, continuously.