SEC to investigate Goldman Sachs trading practices
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Unlikely. I guess this is the fall out from the "incident" of GS code being stolen. Do we even see that one goes anywhere?
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The person Goldman Sachs recently had arrested, was a person who was a specialist in intercepting and indexing network routing information and may just possibly have used security access codes and built a system to acquire trading information PRIOR to transaction_commit time points at NYSE.
The profitability of this split-second information advantage would have been and could have been extraordinary. Observed yielding profits at $100,000,000 a day.
GS has special access inside the system from its status assisting the Working Group on Financial Markets (colloquially the Plunge Protection Team) created by Presidential Order two decades ago. GC also acts as Special Liquidity Provider for NYSE.
Here is the most complex system that Mr. Aleynikov, the arrested employee worked on.
Strategic Telecom Optimized Routing Machine
Inventors: Sergey Aleynikov
Agents: OBLON, SPIVAK, MCCLELLAND MAIER & NEUSTADT, P.C.
Assignees: IDT Corporation
Origin: ALEXANDRIA, VA US
IPC8 Class: AH04M700FI
USPC Class: 37922101
The patent application is a public document.
Basically GS might be using a program to intercept network traffic to determine, milliseconds in advance, when other participants will be active in the electronic market by detecting changing levels and types of network traffic.
The profitability of this split-second information advantage would have been and could have been extraordinary. Observed yielding profits at $100,000,000 a day.
GS has special access inside the system from its status assisting the Working Group on Financial Markets (colloquially the Plunge Protection Team) created by Presidential Order two decades ago. GC also acts as Special Liquidity Provider for NYSE.
Here is the most complex system that Mr. Aleynikov, the arrested employee worked on.
Strategic Telecom Optimized Routing Machine
Inventors: Sergey Aleynikov
Agents: OBLON, SPIVAK, MCCLELLAND MAIER & NEUSTADT, P.C.
Assignees: IDT Corporation
Origin: ALEXANDRIA, VA US
IPC8 Class: AH04M700FI
USPC Class: 37922101
The patent application is a public document.
Basically GS might be using a program to intercept network traffic to determine, milliseconds in advance, when other participants will be active in the electronic market by detecting changing levels and types of network traffic.
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- 12,164
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- 273
All is fair in love, war and on Wall Street.
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Yes, its. High Frequency trading receives more attention every day:
High-Frequency Trading Faces Challenge as Schumer Presses SEC
July 27 (Bloomberg) -- High-speed trading in the U.S. stock market may face its biggest threat after Senator Charles Schumer proposed prohibiting so-called flash orders.
Schumer, the third-ranking Senate Democrat, urged the Securities and Exchange Commission to ban the practice in which some equity exchanges hold orders to buy and sell shares for a split second before publishing them on competing platforms. Nasdaq OMX Group Inc., Bats Global Markets and Direct Edge Holdings LLC, which handle more than two-thirds of the shares traded in the U.S., offer flash orders to their customers.
High-Frequency Trading Faces Challenge as Schumer Presses SEC
July 27 (Bloomberg) -- High-speed trading in the U.S. stock market may face its biggest threat after Senator Charles Schumer proposed prohibiting so-called flash orders.
Schumer, the third-ranking Senate Democrat, urged the Securities and Exchange Commission to ban the practice in which some equity exchanges hold orders to buy and sell shares for a split second before publishing them on competing platforms. Nasdaq OMX Group Inc., Bats Global Markets and Direct Edge Holdings LLC, which handle more than two-thirds of the shares traded in the U.S., offer flash orders to their customers.
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More inquiries and investigation
Goldman Faces Inquiries on Pay and Derivatives - DealBook Blog - NYTimes.com
Goldman Faces Inquiries on Pay and Derivatives - DealBook Blog - NYTimes.com
