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'Flash Crash' Trader Pleads Guilty, Facing Up To 30 Years In Prison (telegraph.co.uk)
Slashdot reader whoever57 writes;
Navinder Sarao, the British trader who was accused of causing the "flash crash" in 2010 and was extradited to the U.S. this week has pleaded guilty to one count of wire fraud and one count of spoofing. No details of the plea deal have been released, but it's believed that he's agreed to forfeit $13 million. Several years of jail time are also expected for Mr. Sarao.
From the Telegraph: Sarao, a 37-year-old working out of a modest suburban home in Hounslow in west London, allegedly made tens of millions of dollars with a computer program that could automatically manipulate prices... "Navinder Sarao abused sophisticated technology to make a quick profit, and jeopardised the integrity of US financial markets," said Assistant Attorney General Leslie Caldwell.
Sentencing guidelines suggest he'll spend at least six and a half years in prison, though he faced a maximum possible sentence of 30 years and still faces the possibility of $38 million in sanctions.
From the Telegraph: Sarao, a 37-year-old working out of a modest suburban home in Hounslow in west London, allegedly made tens of millions of dollars with a computer program that could automatically manipulate prices... "Navinder Sarao abused sophisticated technology to make a quick profit, and jeopardised the integrity of US financial markets," said Assistant Attorney General Leslie Caldwell.
Sentencing guidelines suggest he'll spend at least six and a half years in prison, though he faced a maximum possible sentence of 30 years and still faces the possibility of $38 million in sanctions.
Navinder Sarao abused sophisticated technology to make a quick profit, and jeopardised the integrity of US financial markets,
If one guy can cause this, it proves that the US financial markets *intrinsically* don't have much integrity.
Just like on-line gaming, instead of punishing the idiots who can't make the system cheat-proof, just punish the people who take advantage of the broken system. Typical.
"Navinder Sarao abused sophisticated technology to make a quick profit, and jeopardised the integrity of US financial markets," said Assistant Attorney General Leslie Caldwell.
TRANSLATION:
"Only we get to fuck with the integrity of US financial markets." - Wall Street Bankers
Just cruising through this digital world at 33 1/3 rpm...
He was abusing sophisticated technology that ruined the returns of other people using sophisticated technology, lock him up.
If he had paid the right people and bought a seat on the exchange, they'd have called it HFT and it wouldn't have been an issue.
But manipulate prices from your garage, and off to prison for you.
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That is not a fair accusation!
I just misunderstood what the other guys meant when they talked about all the Babes they'd slept with!
-=This sig has nothing to do with my comment. Move along now=-
I don't know if this information is public, but what is his supposed crime, specifically?
Did he break the rules of the exchange? Did he trespass, break in, or otherwise tamper with the system?
If you're playing poker, actually manipulating the deck, looking at other people's cards, are both against the rules. Participants agree to those rules when they join the table.
Let's say you're really good at bluffing other people or reading their bluff, you've done nothing wrong. And calling it "manipulation" or "abuse" or "profiting" or "ruining other players" is just a way to obscure that fact.
These comments are mine; I do not speak for my employer.
And they got to keep their bonuses. The system is corrupt to the core.
Did he jerk off under aged servers? Still not clear WTF crime was and shouldn't have to RTFA to find out.
I can't help but feel that a guy is going to be sentenced primarily because he didn't have the proper business background and maybe wasn't wearing a suit with ties, and that he would do just fine today if he had done the same for some major financial institution.
As a side note, I do much care for your insults ("troll").
In response to my question and analogy, you offer an insult and an unsubstantiated claim which begs the question again.
If you don't know the answer, then don't reply, let alone insult.
These comments are mine; I do not speak for my employer.
So cancelling orders (his apparent "crime" http://www.telegraph.co.uk/fin...) is now illegal in USA. Wonder what the market impact of that will be.
Also why did UK allow the extradition. He wasn't in USA and quite possibly didn't break any laws where he was; this looks like USA doing the usual thing of trying to make it's own laws global.
It always boggles my mind when people who abuse computers for financial gain face harsher sentences than so many rapist and murderers (not exclusive). Then I truly consider the reasons why and I choose to remain boggled.
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when the big U.S. financial institutes and banks do this and massive micro-trading, it's legal, but when someone else moves on their little game, it's illegal and calls for extradition? Criminals.
now when do they put all the bank executives that caused the crash from before that in prison? Or is this the patsy that we are all supposed to point at and ignore that the same scumbag bankers are doing the same shit today at Wells Fargo and other places?
Do not look at laser with remaining good eye.
I feel the first orange pardon coming on.
Well, maybe the second - Chris Christie will be the first (ala Ford/Nixon)
They are just more subtle about it. And they make more money doing it.And they are too big to fail. And they don't like any lone rangers stepping on their turf.
He bought stock. He then sold it. Isn't that basically what goes on in stock exchanges?
Last I heard, that's part of how they make their money.
If he could make bogus orders, someone else can too, and the problem is with the ordering system.
Following the links shows that he was accused of spoofing, which is the creation of fake orders to manipulate stock prices.
After some gooling, the problem for me is: The 2010 flash crash occured on May 6, 2010, while the Dodd–Frank Wall Street Reform and Consumer Protection Act, which makes spoofing illegal, only came into effect on July 21, 2010. And it is a US law, which does not have an effect on the extradition from UK.
He deliberately, willfully and maliciously broke those rules to favor himself and in the process caused other people, who were playing by the rules, to lose money.
Yes and no. He placed trades to make it look like a large amount of selling was about to happen then others place sell orders with even lower prices. He then quickly cancelled his orders and quickly bought the stock at the lower price. However had his orders gone through he would have been on the hook for them.
Compare this to the behaviour of large financial corporations who watch one exchange and when they see a large buy or sell order come it quickly, using high speed networks not available to anyone else, place an appropriate order on another exchange before the large order gets there in order to take advantage of the increase or drop in the price the large order will cause.
Both techniques are dishonest and both cause other people to lose money. However one technique was figured out by large financial corporations and the other by a lone trader. Guess which one is deemed to be legal despite the incredible similarity between the two techniques. If he is guilty why are the large financial corporations who are almost playing the identical game not?
HFT traders do place orders that they intend to cancel, however, if someone successfully intercepted an order placed by a HFT trader, that order would get filled. It appears to me that there was no possibility that Navinder could fill the orders he placed.
So literally the only difference between them is that if Navinder had screwed up he would not be able to cover his loses while the large corporations engaging in HFT can so it is legal for them but not for him? I thought we got rid of this idea that there are one set of rules for the rich and another set of rules for the poor back when we dumped feudalism but clearly someone forgot to tell the financial markets.
As someone who developed algorithmic and high frequency trading software, I fully agree that he is being singled out.
This guy was only doing what many of the large financial houses were and still are doing.
Sick of articles that say that someone is going to be sentenced or prosecuted, it's pointless.
Tell me when it's actually happened.
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