Slashdot Mirror
Norwegian Day Traders Convicted For Manipulating Computer Trading System
An anonymous reader submits news of the conviction of two Norwegian day traders, Svend Egil Larsen and Peder Veiby, who were on Wednesday fined and given suspended sentences (Norwegian court, Norwegian document) for cleverly working out — and cashing in on — the way the computerized trading system of Interactive Brokers subsidiary Timber Hill would respond to certain trades. They used the system's predictable responses to manipulate the value of low-priced stocks. The pair have gotten some sympathetic reactions from around the world, and promise to appeal.
It's a crime because you're exploiting a weakness in a computer system, and cheating people out of cash. Same as if you find a bug in MS and infect everyones computers with a trojan, intercept their paypal passwords, and steal the money in those accounts. The fact that you steal from cyberspace rather than a physical person, that's irrelevant.
It's illegal, plain and simple.
"Cheating" the system is easy, but checking algorithms will catch you every time. A "simple" way to cheat around 80-90% of automated brokering systems, and likely what the two Norweigians did:
Get two accounts with the system
Find a stock that rarely sells
Buy a ton of this stock with account 1 (low priced is good)
Place a BID for a few of the stocks significantly over current value with account 2
Price rises
Now sell all of your cheaply purchased stocks on account 1 at the new price
Bingo, you just made a million bucks !
But good luck trying to collect it at the bank, as you'll have FCC (or whatever they're called in your local country) closing your accounts within the hour, and reporting you to the police.
--- To err is human... Am I more human than most ?
this is precisely why the economy has turned to crap, why there is a cycle of bubbles & busts and other various forms of shenanigans, it is all the greedy people that have gamed the system for extra profits have milked the cash cow and now there is no milk left and the cow is emaciated and about to die. greed & stupidity for short term profits at the expense of long term stability seems to be the norm now, i hope the economy does crash because i can live on beans & rice easier than those rich fatcats on wallstreet who will be jumping out windows again like they did in the crash of 1929 that ushered in the great depression of the 1930's, fuck all those stupid greedy bastards i hope they choke on their filthy money.
Politics is Treachery, Religion is Brainwashing
...so I want these 2 to burn in hell.
Then I want Interactive Brokers to fix their algos so that blond socialists can't game them any more.