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SEC Has Issued Subpoenas As Part Of Crash Investigation

Tyler Durden's picture




 

Bloomberg reports that "U.S. Securities and Exchange Commission Chairman Mary Schapiro said the agency’s enforcement unit has issued subpoenas as part of its investigation of last week’s stock plunge." Is the general population about to get our first unredacted, and unbiased look into the nuts and bolts of HFT operations like Getco, Medallion, Citadel and Goldman (yeah, we can name drop too)? And whatever happened with that SEC investigation of Renaissance (yeah, we haven't forgotten). We can't wait to see what public data the subpoena uncovers.

 

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Tue, 05/11/2010 - 17:47 | 344579 BlackBeard
BlackBeard's picture

Woooo this is about to get juicy.

Tue, 05/11/2010 - 18:04 | 344597 fuggetaboutit
fuggetaboutit's picture

The absolutely categorically unreal thing is this -- we have had like 3 hearings and now subpoenas on basically the tip of the "everyone trying to run through the same door" panic that will eventually blow this whole market to pieces

But, goldman and jpm combined go 126 for 126 in Q1 '10 - two separate banks, THOUSANDS of people doing different jobs, all of which culminates in ZERO days of trading loss -- and there are no hearings about THAT????

Man is this thing gonna burn when it gets going

Tue, 05/11/2010 - 18:26 | 344647 malusDiaz
malusDiaz's picture

Burn? its more like an A-Bomb detonating.

Tue, 05/11/2010 - 18:33 | 344674 Cistercian
Cistercian's picture

 You are just jealous because GS and JPMorgan are better than you.

   They are better than you are at frontrunning their clients.

 They are better than you at manipulating the markets, and in the process stealing from their clients.

 They are better than you at placing employees at very high levels of the government too.

   You are just jealous, and that is not very attractive is it?

 

 Ok, you may have a point...they could be the ultimate super theivo-matic corporations.

 

  Compared to zero down days for both concerns, the market dive looks normal...If not inevitable as the theivo-matic algos go for blood.

 

 

 

Tue, 05/11/2010 - 18:47 | 344726 Duuude
Duuude's picture

"Thievo-matic"

Superb.

Contact Wiki.

Tue, 05/11/2010 - 19:09 | 344803 Cistercian
Cistercian's picture

 Thanks!

Tue, 05/11/2010 - 22:24 | 345213 Boop
Boop's picture

Not to mention Urban Dictionary.

Wed, 05/12/2010 - 04:26 | 345549 Bringin It
Bringin It's picture

ultimate super theivo-matic indeed ++

Tue, 05/11/2010 - 18:41 | 344707 sushi
sushi's picture

Burn?

Once the govt figures out how its done what's the bet they decide to nationalize the trading system. So they can ensure "fairness" and "equitable equities for the unequal." Of course the govt will take the same slice as GS and JPM but now it will be "our" slice. Cannot expect the Chinese to pay for everthing you know.

Wed, 05/12/2010 - 04:31 | 345551 Bringin It
Bringin It's picture

Sushi, you forget.  There is no real market anymore.  What's to learn?  This HFT system talks to that HFT which talks to their HFT ...  The crocodiles are saying come on in the waters fine, but the wilderbeasts don't want to swim anymore.  Their is no plunder without fresh meat.

Tue, 05/11/2010 - 18:59 | 344769 reading
reading's picture

dont forget bofa too...

Tue, 05/11/2010 - 23:16 | 345317 Strider
Strider's picture

This hearing crap is like a water balloon fight , have a few laughs ,dry off , come back the next day. I say water board , lets get to the real truth then .....more water boarding for laughs.

Wed, 05/12/2010 - 03:31 | 345528 Popo
Popo's picture

"Man is this thing gonna burn when it gets going"

...Man, this thing *should* burn if it ever actually did get going.

There. Fixed that for you.

Tue, 05/11/2010 - 17:48 | 344585 Noah Vail
Noah Vail's picture

I'm sure they're shaking in their boots in the big houses. Skeered.

Wed, 05/12/2010 - 04:34 | 345553 Bringin It
Bringin It's picture

Maybe some Scooter Libby like underlings are getting scared?

Is Scooter still in some country club prison somewhere?  Or did he get out?

Tue, 05/11/2010 - 17:48 | 344588 Mongo
Mongo's picture

I believe it when I see it...

 

Or perhaps they will call in the pope to bless those HFT-servers in case they are "possessed" by some unholy demon from the middle-class

Tue, 05/11/2010 - 18:37 | 344693 knukles
knukles's picture

Golly.

 

That'd make me happier than a Bishop in Boy's Town.

Tue, 05/11/2010 - 20:59 | 345041 Papasmurf
Papasmurf's picture

Hasn't the pope already blessed those HFT servers?  After all, they are doing god's work.

Tue, 05/11/2010 - 17:48 | 344589 Mitchman
Mitchman's picture

Hope springs eternal.

Tue, 05/11/2010 - 18:28 | 344648 Janice
Janice's picture

I think Marc Faber reads Zero!

Marc you're a rock star!!!!  We love you...and your ponytail. 

 

Oh, maybe I should have said gold rock star!

Wed, 05/12/2010 - 04:36 | 345554 Bringin It
Bringin It's picture

+

Tue, 05/11/2010 - 18:07 | 344607 anony
anony's picture

Shapiro is no Pecora. 

An independent, very savvy prosecutor with subpenis power need to be appointed by CONgress, not some bureaucrat with no balls.  

Tue, 05/11/2010 - 18:11 | 344620 AN0NYM0US
AN0NYM0US's picture

 

An independent, very savvy prosecutor with subpenis power need to be appointed by CONgress, not some bureaucrat with no balls. 

 

aren't they one and the same? :)

Tue, 05/11/2010 - 18:11 | 344618 JW n FL
JW n FL's picture

http://www.youtube.com/watch?v=F0lAIf78WIo&playnext_from=TL&videos=Ch6RUCtRvas

 

all credit to who posted this the first time... it was not me.. but a great watch and the names are not those mentioned..

Wed, 05/12/2010 - 00:13 | 345408 Bear
Bear's picture

Trades being cancelled ... haven't heard anything on this!

Tue, 05/11/2010 - 18:12 | 344621 tony bonn
tony bonn's picture

the only reason the whore has subpoenaed records is so that she can destroy them...

Tue, 05/11/2010 - 18:15 | 344628 JohnKing
JohnKing's picture

Well, these things aren't material anyway, so they offer a trading opp.

Tue, 05/11/2010 - 18:35 | 344677 knukles
knukles's picture

Yeah right...
Subpoena all the in depth NY Times articles.

More Diversions Men!  Investigate! The Unruly Crowd Calls for Action!

Be just like Goldman agreeing to "Review" their Internal Controls. 

 

Tue, 05/11/2010 - 18:33 | 344678 optimator
optimator's picture

Now, once more, are these all the T&L expense accounts we listed on our subpoena?

Tue, 05/11/2010 - 18:35 | 344686 Jessica6
Jessica6's picture

Will they also be looking into what made them go back up so fast?

Or JPM and GS's zero-loss trading days this past quarter.

Stupid questions, I know...

Oh well at least where I'm from the authorities are on top of things:

http://www.cbc.ca/canada/calgary/story/2010/05/09/calgary-bmo-mortgage-f...

Oh, wait...

 

 

Tue, 05/11/2010 - 18:41 | 344702 Simon Jester
Simon Jester's picture

Please.

 

Pure theater.

Wed, 05/12/2010 - 03:36 | 345530 Popo
Popo's picture

Exactly. Just about every comment above yours is remarkably idealistic. (Something ZH readers aren't known for...)

This will go nowhere. I'll agree that "things are about to get interesting", when criminal prosecutions with potential jailtime and/or multimillion dollar personal clawbacks begin AGAINST 5,000 to 10,000 INDIVIDUALS.

That's interesting.

Everything else is a token gesture, and is made to keep the sheep (cough.. above posters...cough) happy.

Tue, 05/11/2010 - 18:44 | 344718 vzhyk
vzhyk's picture

You guys are a bunch of optimists, and I am reading Harry Markopolos. Nuf said...

Tue, 05/11/2010 - 18:47 | 344727 colorfulbliss
Tue, 05/11/2010 - 18:47 | 344728 DavosSherman
DavosSherman's picture

reports that "U.S. Securities and Exchange Commission Chairman Mary Schapiro said the agency’s enforcement unit has issued subpoenas to Playboy, Penthouse, Playgirl, Hustler and many online porn sites. Photos in lieu of financial records, high definition and gloss are being sought.  

Tue, 05/11/2010 - 18:57 | 344762 Racer
Racer's picture

When do we get a Melt UP investigation into junk stocks?

Wed, 05/12/2010 - 00:01 | 345392 Bear
Bear's picture

Amen ... I heard not a soul talk about the 'manipulated' Dow 405+ rampup on Monday ... that 100% of which occurred on Sunday overnight making it impossible to cover shorts until the Monday AM. Last Thursday everyone had a chance to trade out of the market, but on Sunday night one had to create an elaborate scheme to buy ES until Mon am then sell and cover shorts. This was far worse than what happened on Thursday ..... Oh, but then this was FED approved (sponsored) manipulation.

Tue, 05/11/2010 - 20:41 | 345002 Fazzie
Fazzie's picture

 Id hate for the SEC to subponea my laptop looking for damning emails. Not because theyd find anything, but Id have to wipe the hard drive to get rid of all the crossdressing midget porn when I got it back!

Tue, 05/11/2010 - 21:04 | 345053 Iam_Silverman
Iam_Silverman's picture

More growling from a toothless, sleepy dog?

Tue, 05/11/2010 - 23:25 | 345332 Apostate
Apostate's picture

This SEC stuff is just there to "reassure" the retail sector. It's political cover-my-ass.

The mutual fund industry is just going to get the shit kicked out of it. Think about who advertises on CNBC - junk ETFs, mutual funds, PIMCO, blah blah blah. CNBC is for Wall Street to talk to itself in semaphore while it pulls a fast one on Grandma.

The government knows very well that all incumbents will be knocked out of office if they wreck the public sector unions. These guys are highly organized lunatics. Machine politics is simple to manipulate. Just... whatever, if a politician gives you a problem, call up friends at prop trading desks and spike the CDS on any particular muni you like. These guys are all tremendously weak. The rank-and-file will flip out - they see Greece. They know what it means.

They're trying to forestall that headline - "Obama to California - Learn to Swim."

It's just face-saving. They have no cards left. They just pissed on the entire limo liberal establishment by going Durka Durka on Goldman.

Tue, 05/11/2010 - 23:27 | 345335 floydian slip
floydian slip's picture

SEC suspects it knows what didn't cause Dow's flash crash

A fat finger. An early idea was that a trader with a "fat finger" entered an order to sell billions of shares instead of millions, flooding the markets. "While we cannot yet definitely rule that possibility out, neither our review nor reviews by the relevant exchanges and market participants have uncovered such an error," Schapiro told a congressional subcommittee.

Procter & Gamble stock. Shares of P&G tumbled more than 30% during the market's turbulence. But there is no evidence that any unusual activity in P&G's stock caused broader problems, Schapiro says.

Hackers or terrorists. The SEC has not found any patterns that would be "consistent" with terrorist activity.

Schapiro said regulators continue to investigate, but likely a "confluence of events which, taken together, exacerbated what already had been a down day."

http://www.usatoday.com/money/markets/2010-05-11-sec-hearing-market-plun...

 

Wed, 05/12/2010 - 14:00 | 346840 Kat
Kat's picture

Yeah...it's called "you killed all the market makers and the liquidity in the market is gone.  So, when shit storms strike, there are no bids and you get a boom and bust market.  Learn to love it or stop restricting shorting in a vain attempt to prop up stock prices". 

 

Occam's razor, people.  Occam's razor.

Tue, 05/11/2010 - 23:51 | 345375 AllSingingAllDa...
AllSingingAllDancingCrapof theworld's picture

Subpoenas? I think they just typed in "penis" while looking for tranny porn.

Wed, 05/12/2010 - 01:08 | 345435 Bear
Bear's picture

This is a must read for everyone here at ZH who looks at this post:

http://www.nytimes.com/2010/05/12/business/12turmoil.html?src=busln

I traded ESM0 on Thursday (in and out for about 150 contracts) ... lost about $12,000 ... I'm going to get it back from the Pig whole took the Bear to the woodshed.

Wed, 05/12/2010 - 02:27 | 345507 Bear
Bear's picture

If you incurred losses, I suggest that you submit a complaint to the CFTC - I have

Wed, 05/12/2010 - 01:15 | 345460 Village Idiot
Village Idiot's picture

deleted

Wed, 05/12/2010 - 03:02 | 345520 carbonmutant
carbonmutant's picture

Gee, would the SEC have issued subpoenas if the market had jumped up 900 points.

That drop must have put quite a dent the the White House's "economy propaganda plan".

 

Wed, 05/12/2010 - 10:52 | 346148 Jim B
Jim B's picture

+1

Wed, 05/12/2010 - 13:58 | 346830 Kat
Kat's picture

LOL!

 

I just love how you think that the SEC will uncover "the truth".  Your belief that the SEC gives a rats ass about improving the maret should have been shattered when they capitulated to demands to put more restrictions on short selling.

A bunch of market makers left the business.  HFT is all that's left.  Stops were triggered.  The market orders had no market makers bids to hit out out because the SEC has been busy restricting this, regulating that and raising fees.  So, no liquidity, no bids.

What's left?

50-70% of daily liquidity is provided by these HFT guys because they are the only ones who can still operate in a world of massive trading restrictions and increasing fees.  Without the HFT guys, you're STILL not going to get any bids to hit.  If they provide 50-70% of liquidity, where will this liquidity come from if you maintain overly restrictive trading rules and increasing regulatory and exchange fees?

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