Next Up On The US Attorney's Radar: High Frequency Trading
While running and hiding is easy for carbon-form based hedge funds, it may be a little more difficult for collocated servers: they tend to be welded to the ground. Yet running and hiding may be precisely what they need to do soon. After Manhattan US Attorney Preet Bharara is done disassembling SAC, his next target will be ZH's favorite topic: high frequency and prop trading. Which is sad - we may have to branch out into sports and pornography soon, as all the topics we had been covering for years are one by one tabled by the those whose job it is to fix the fraud in the markets. Joking aside, here is what the NYPost had to say: "Computer-driven trading shops and independent proprietary trading firms may be the next to feel the heat from watchdogs aiming to clean up Wall Street, source tell The Post. Federal agents, who have ratcheted up the heat on insider-trading rings linked to hedge funds and investment firms, are also are targeting firms that purport to offer individual investors specialty trading techniques employed by Wall Street powerhouses like Goldman Sachs, these sources said." We, for one, can't wait to listen to the Jon Stewart's Cash Cow upcoming interview from a NYPD holding cell.
More from the Post:
These firms, which claim to offer market access that typical investors aren't privy to, are being eyed because they may be helping bad actors conduct flash trades that could be tied to insider-trading activity, sources said.
In a speech last month, Manhattan US Attorney Preet Bharara hinted that federal prosecutors are closing in on high-frequency traders and so-called proprietary trading firms.
"When an institution or a trader can jump in and out of positions at the speed of light and in enormous volumes, illicit trades become easier to mask, harder to find, and subject to plausible deniability," Bharara said.
Oh well, perhaps the robots can create an expert network all for themselves so they can get advice on exit strategies. Keep an eye out on explosive (outbound) Fedex shipments of toner cartridges with petaflop processing capacity and market "flash crash" inducing capabilities.