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FBI And SEC Team Up To Take Down HFT

Tyler Durden's picture




 

After exposing the stock market manipulative arsenal that is High Frequency Trading, quote stuffing, flash trading, packet churning, layering, sub-pennying, liquidity, latency and dark pool arbitrage, NBBO and Reg NMS exemptions, "hide-not-sliding", collocation, and much, much more for four years, or so long even Credit Suisse joined the chorus we started in April of 2009, we are glad to learn that finally, with a ridiculous Rip Van Winklesian delay, but better late than never, "the FBI has teamed up with securities regulators to tackle the potential threat of market manipulation posed by new computer trading methods that have taken operations beyond the scope of traditional policing."

In other words, the SEC has finally realized it can no longer pretend it is not co-opted, but because it has no clue where to even start with HFT, has asked the help of the Feds. Which in itself is hardly reason for optimism, but if there is one thing Hans Gruber has taught us, it is that when the Feds get involved, the first thing they do is cut the power, and in this algo-based market that will end some 99% of all daily manipulative practices we have all grown to love and look forward to every single day.

From the FT:

FBI agents have joined forces with a new unit within the Securities and Exchange Commission that examines hedge funds and other firms that are using algorithm trading strategies.

 

The SEC’s Quantitative Analysis Unit is focusing on the emergence of high-frequency trading firms and the rise of dark pools. Traders using these methods can manipulate the market by flooding it with quotes, known as quote stuffing, or placing millions of orders that are quickly cancelled, to drive others to trade in ways that benefit their position, a practice known as layering.

 

Some of these trading strategies have been accused of destabilising the market and putting retail investors at a disadvantage. Their supporters have said they increase liquidity in securities and reduce volatility.

Accused? Obviously the author of this story has never actually, what's the word, traded, submitted a VWAP or any other market-based order.

There is a reason the NY Fed works with HFT-giant Citadel: it is precisely to facilitate what HFT is "accused" of doing. But one can't go and expose all the manipulated secrets that have sent this fake market to even faker all time highs.

Authorities are exploring potential holes in the system, including new algorithms referred to as “news aggregation” which search the internet, news sites and social media for selected keywords, and fire off orders in milliseconds. The trades are so quick, often before the information is widely disseminated, that authorities are debating whether they violate insider trading rules, the people familiar with the matter said.

 

Authorities are also monitoring alpha capture systems, platforms where sell-side firms share information with buyside professionals, for potential front running or insider trading. Also on their radar is artificial intelligence trading, an algorithm that predicts market reactions based on history.

One can see it already: "it was all Twitter's fault."

Nonetheless, there is at least a trace reason to be hopeful:

One government official said market structure could be the next big area for cases, although it was not clear whether any of the strategies violated criminal laws. To prove a criminal case the FBI would need to show that the trader intended to manipulate the stock, which could prove more difficult for strategies that are triggered by computers.

The hope is not from the SEC or FBI actually putting someone behind bars, as this proves...

The SEC has brought a handful of cases involving these strategies and other investigations are under way. No criminal case is on the horizon, one of the people said.

... But at least neither the Feds nor the SEC will be able to plead ignorance when confronted with the same knowledge that our readers had back in 2009.

Then again, by the time the two agencies catch up to what anyone with half a frontal love and an interest in the stock market knows already, the Dow will be either at 36,000 or 0, or in other words, too late.

 

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Tue, 03/05/2013 - 15:25 | 3301702 CalibratedConfidence
CalibratedConfidence's picture

SEC's National Exam Program

http://www.calibratedconfidence.com/2013/02/secs-national-exam-program.html

Flaccid institution attempting to maintain relevance

Tue, 03/05/2013 - 15:29 | 3301711 hedgeless_horseman
hedgeless_horseman's picture

 

 

Easy fix, just bring back the steenth.

These decimals are the devils work.

 

Tue, 03/05/2013 - 15:40 | 3301771 Boris Alatovkrap
Boris Alatovkrap's picture

Q: How many SEC agent for screw incandescent bulb?

A: None, all is too busy watch porn on government desktop terminal.

(and people is to take serious investigation in HFT? BTFD!)

Tue, 03/05/2013 - 15:46 | 3301808 icanhasbailout
icanhasbailout's picture

The obvious real purpose of this is to eliminate small-time competition to the big players, who will, as usual, remain immune to enforcement.

Tue, 03/05/2013 - 15:49 | 3301826 Joe Davola
Joe Davola's picture

C'mon MDB_, admit it - your posts come from artificial intelligence, not the real stuff.

Tue, 03/05/2013 - 16:26 | 3301947 redpill
redpill's picture

 

* Report notes FBI experts theorize that water may very well be wet

Tue, 03/05/2013 - 17:03 | 3302117 Say What Again
Say What Again's picture

If there was a way to merge the beauty of HFTs with the omnipotence of Drones, we would have a great new technology to replace CRAPPL and save the world.

Tue, 03/05/2013 - 18:35 | 3302517 CH1
CH1's picture

have taken operations beyond the scope of traditional policing

And here we find the purpose of the theatrical performance: More power, more intrusion, more tyranny - always more tyranny.

Tue, 03/05/2013 - 22:28 | 3303394 philipat
philipat's picture

Why not just use Nanex? They watch micro-movements in the markets NOT Porn.

Tue, 03/05/2013 - 16:15 | 3301905 fourchan
fourchan's picture

the rich get richer. the poor go to jail.

Tue, 03/05/2013 - 21:23 | 3303146 TheFourthStooge-ing
TheFourthStooge-ing's picture

Boris Alatovkrap is said:

and people is to take serious investigation in HFT?

Seriously of taking not doing the purpose of HFT investigates. SEC,FBI do are investigating make purpose for distraction with attention diversion from somesuch matter otherwise.

BTFD!

Boris Time For Drinkings! Good call.

Tue, 03/05/2013 - 15:39 | 3301774 nope-1004
nope-1004's picture

Just propaganda.  They used HFT to bring the market back to previous "pre-crisis" levels, where seniors can look at their portfolio and not want to riot.  Then, they bring in the investigation into HFT.  LOL.  Suck it up sheeple.  Look how good the authorities are at bringing "justice".

 

Tue, 03/05/2013 - 17:43 | 3302261 The Heart
The Heart's picture

"Just propaganda."

Ding, ding, ding. We have a winner here folks!@

Distraction Project Wag-the-dog #33.998b sub 913twoZ.

More coming to a theater near you soon.

Bottom line here: Final actions and report coming in 2029.

Tue, 03/05/2013 - 18:10 | 3302400 DeadFred
DeadFred's picture

After a long and comrehensive investigation the conclusion will be that the algos are"just too complicated to follow" and the money just vaporized.

Any HFT that gets taken down will be a competitor to TPTB's algos. Level the playing field by only letting the chosen stay on the field

Tue, 03/05/2013 - 17:51 | 3302259 fudge
fudge's picture

 

 FBI in action  ...   Have Badge Will Chase   :)

Wed, 03/06/2013 - 02:51 | 3303947 All Risk No Reward
All Risk No Reward's picture

>>Flaccid institution attempting to maintain relevance<<

They are extremely relevant - you just don't understand the system in which they operate.

The SEC's job is to protect the criminals who finance the campaigns of the politicians.

Duh!  The porn narrative - it is likely completely false and designed to give you a false narrative as to why they aren't doing the job you think they are supposed to do.

They are actually doing a great job at their true mission - protect the criminal class.  Do you see any JP Morgan or Goldman bankers going to jail?  How about Corzine?

Fully protected - mission accomplished.

We have to stop being establishment gobemouches and realize that the government is run by an international gang of banking mobsters.

They run Debt Money Tyranny right out in the open and the ONLY OUTCOME IS TO BANKRUPT ITS HOST NATION.

http://www.keepandshare.com/doc/4768883/debtmoneytyranny-6-1-pdf-60k?tr=77

The laws that apply to them aren't even laws due to a lack of a penalty...  they think the public is so stupid and such gobemouches that they don't even put penalties into the "laws" that apply to themselves.

http://www.keepandshare.com/doc/3324744/wmdebt-graph-3-79k?dn=y

Most that will read this will be emotionally unable to get upset because they've lost their humanity at some level.  Those charts have been downloaded probably 15,000 times and less than 10 people have bothered to leave a comment.

Pretending we aren't being punked like bitchezzzzz, bitchezzzzz, doesn't make it any less true.

Man up, people.  Man up.  Send those charts out.  Spread the word. 

Stop funding the demons by using cash.

Stop funding the demons by buying small and local.

Stop paying them to lie to you via TV.

Tue, 03/05/2013 - 15:25 | 3301703 malikai
malikai's picture

Bullshit. They're just going to make sure only "approved" HFTs can operate.

This is the beginning of a shakedown.

Tue, 03/05/2013 - 15:29 | 3301729 Ahmeexnal
Ahmeexnal's picture

it's only a cover to explain a sudden crash in the stock markets.
bank holiday in the very near future.

Tue, 03/05/2013 - 15:32 | 3301744 otto skorzeny
otto skorzeny's picture

they're already having a holiday from paying out interest on savings

Tue, 03/05/2013 - 15:51 | 3301832 LMAO
LMAO's picture

Hooooooray, let the wrist-slapping commence !

Tue, 03/05/2013 - 15:29 | 3301730 Confundido
Confundido's picture

Approved HFT = HFT in fiat precious metals.

Tue, 03/05/2013 - 15:51 | 3301833 NotApplicable
NotApplicable's picture

Marks to the left of me. Club members to the right.

Divide and conquer. Good work, if ya can get it.

Tue, 03/05/2013 - 15:55 | 3301846 GolfHatesMe
GolfHatesMe's picture

And any HFT that shorts the market after all the Sheeple $$ is in, is doing God's work

Tue, 03/05/2013 - 16:22 | 3301929 DblAjent
DblAjent's picture

13b shares short on a day the dow hits historic highs supposedly due to record earnings (buy-backs) and muli-quarter growth (none).

What a load of retard turd.

fuck you market

Tue, 03/05/2013 - 17:35 | 3302231 CPL
CPL's picture

Bingo.

Everyone is betrayed, no one wins.

Tue, 03/05/2013 - 18:32 | 3302527 CH1
CH1's picture

Everyone is betrayed, no one wins.

Well, aside from the dicks who run the game.

Tue, 03/05/2013 - 23:14 | 3303553 Boozer
Boozer's picture

CPL - I like the new rasta-ish avatar. 

Tue, 03/05/2013 - 15:27 | 3301716 JustPrintMoreDuh
JustPrintMoreDuh's picture

Oh yeah, I'm going to hold my breath anticipating a quick resolution to this uber clusterfuck ... </sarc> 

Tue, 03/05/2013 - 15:27 | 3301721 Yen Cross
Yen Cross's picture

 That has to be one of the best " Jokes of The day", I've read in a long time... HFTs are parasites for sure, but these guys need a few scapegoats for when the [house of cards] falls. Meanwhile that [Destroyer of Nations] keeps printing away!

Tue, 03/05/2013 - 15:31 | 3301724 otto skorzeny
otto skorzeny's picture

I thought everyone in the FBI was looking for Stacey Peterson and everyone in the SEC was looking for Miss Teen Delaware's porn video?

Tue, 03/05/2013 - 15:28 | 3301725 buzzsaw99
buzzsaw99's picture

Just unplug the co-located servers and done.

Tue, 03/05/2013 - 15:32 | 3301745 chdwlch1
chdwlch1's picture

Update: Due to the Sequester, the FBI and SEC will not be able to conduct any further investigation...

Tue, 03/05/2013 - 18:06 | 3302383 Crash Overide
Crash Overide's picture

Update: The FBI & SEC has discovered massive fraud and manipulation within the HFT framework but prosecuting the firms responsible would destabilize the entire financial system. Also due to sequester cuts we cannot afford to make an official statement, please refer to our previous HSBC comments, good day.

Tue, 03/05/2013 - 15:32 | 3301746 resurger
resurger's picture

Good morning friends...

Tue, 03/05/2013 - 15:32 | 3301748 sitenine
sitenine's picture

Oh sure, let's just eliminate the only mechanism left that is providing any kind of positive ecomic data. Goodbye velocity, goodbye liquidity, goodbye mindless Fed induced ramps, goodbye economy, because banks with billions of dollars worth of cash they just received for toxic MBS will no longer have a way of washing that cash through any kind of investment vehicle that the average Joe won't instantly recognize as fraud. I call bullshit. HFT, right or wrong, is an integral part of how the ponzi works.

Tue, 03/05/2013 - 15:42 | 3301785 chubbyjjfong
chubbyjjfong's picture

+1 Yep, I smell scapegoat

Tue, 03/05/2013 - 15:42 | 3301786 Tortuga
Tortuga's picture

Are you conflicted?

Tue, 03/05/2013 - 15:53 | 3301841 sitenine
sitenine's picture

Me personally, no. I say kill it all. Shut the fucking algos down, and let it all reset with fair offers from buyers and sellers with actual investment motives. But what the fuck do I know?

Tue, 03/05/2013 - 16:00 | 3301855 NotApplicable
NotApplicable's picture

You're missing the point. It's all about WHOSE HFT is integral.

Gotta wipe out the rouges, lest they undermine the fraud in progress.

Oligarchs need security too, you know.

Tue, 03/05/2013 - 16:10 | 3301891 sitenine
sitenine's picture

Indeed. What is so obviously needed here is an extrajudicial kill list, and the POTUS should have the authority to drone strike them at will. Fascism, I mean FORWARD,  bitchezz!

Tue, 03/05/2013 - 17:03 | 3302116 BullsNBeers
BullsNBeers's picture

Hell yeah sitenine. If we back the ponz out of everything we're basically a world full of hobos scratchin our heads wondering what the fuck happened.

HFT's, insider trading, corrupt pol's, lying rating agencies, regulating agencies with agendas, wrist slap fines for club members, ETF manipulation of commodities, the friggin FRB.

Sans all this crap the markets and by extension the broader economy are basically garbage. They will do everything in their power to offset not only moral but also financial responsibility for this and will gladly continue to attempt to ram in down our throat whether it be through further currency devaluation, asset bubbles or obscene tax/confiscation tactics.

 

 

 

Tue, 03/05/2013 - 15:33 | 3301750 The Proletariat
The Proletariat's picture

Somewhere porn is involved in this story....it has to be

Tue, 03/05/2013 - 17:40 | 3302251 DollarMenu
DollarMenu's picture

I think it's in the last line there, where a reference is made to "frontal love."

Wed, 03/06/2013 - 02:55 | 3303951 All Risk No Reward
All Risk No Reward's picture

The porn narrative is a false narrative to keep people like you talking about porn instead of...

OUTING THESE CRIMINALS IN THE SEC AS BEING COMPLETELY CAPTURED BY THE CRIMINALS WHO FINANCE THE ELECTION CAMPAIGNS OF THE CRIMINALS WHO PRETEND TO REPRESENT THE GULLIBLE CITIZENRY.

If people posted this link exposing the exact mechanics of the monetary fraud, whcih is REALITY, instead of laughing about the psy-op flase SEC porn narrative engineered to keep you off their criminal trail...

http://www.keepandshare.com/doc/4768883/debtmoneytyranny-6-1-pdf-60k?dn=y

...well, we'd actually make some progress educating the general gullible population and ignorati, no?

Tue, 03/05/2013 - 15:34 | 3301756 slightlyskeptical
slightlyskeptical's picture

It's the equivelant of painting the tape...an illegal practice. Just call it what it is and ban it all together.

Tue, 03/05/2013 - 16:49 | 3302073 ceilidh_trail
ceilidh_trail's picture

Fed's been doing it for years...

Tue, 03/05/2013 - 15:37 | 3301758 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Day late and a dollar short. Call me when Moe puts some of these assholes behind bars or brings charges against the FED, JPM or GS for market manipulation via HFT trading.

SEC should also be forcing all them to paying a transaction fee on all derivatives trades even if it is only like a 100th of a cent. If you make that transaction fee high enough it slow down the volume of HFT trading.

Tue, 03/05/2013 - 16:23 | 3301932 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I'll go out on a limb here and even say transaction fees on all individual HFT trades would be politically popular and play well with the populace as long as they don't find out those fees are rigged to never go back towards being used for anything useful except to be conveyored back to people like the FED and JPM through hidden subsidies.

Tue, 03/05/2013 - 18:12 | 3302415 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I spoke too soon looks like Congress is trying to pass a financial transaction tax yet again.

http://www.govtrack.us/congress/bills/113/hr880/text

I'll only quote the key portions people can click through to read the rest.

BILL

To amend the Internal Revenue Code of 1986 to impose a tax on certain trading transactions.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ‘Wall Street Trading and Speculators Tax Act’.

SEC. 2. TRANSACTION TAX.

    (a) In General- Chapter 36 of the Internal Revenue Code of 1986 is amended by inserting after subchapter B the following new subchapter:

‘Subchapter C--Tax on Trading Transactions
  •  

      ‘Sec. 4475. Tax on trading transactions.

‘SEC. 4475. TAX ON TRADING TRANSACTIONS.

‘(a) Imposition of Tax- There is hereby imposed a tax on each covered transaction with respect to any security.

‘(b) Rate of Tax- The tax imposed under subsection (a) with respect to any covered transaction shall be 0.03 percent of the specified base amount with respect to such covered transaction.

‘(c) Specified Base Amount- For purposes of this section, the term ‘specified base amount’ means--

    ‘(1) except as provided in paragraph (2), the fair market value of the security (determined as of the time of the covered transaction), and

    ‘(2) in the case of any payment described in subsection (h), the amount of such payment.

‘(d) Covered Transaction- For purposes of this section, the term ‘covered transaction’ means--

  •  

      ‘(A) such purchase occurs or is cleared on a facility located in the United States, or

      ‘(B) the purchaser or seller is a United States person, and

      ‘(A) such security is traded or cleared on a facility located in the United States, or

      ‘(B) any party with rights under such security is a United States person.

  • ‘(1) except as provided in paragraph (2), any purchase if--

    ‘(2) any transaction with respect to a security described in subparagraph (D), (E), or (F) of subsection (e)(1), if--

‘(e) Security and Other Definitions- For purposes of this section--

‘(1) IN GENERAL- The term ‘security’ means--

    ‘(A) any share of stock in a corporation,

    ‘(B) any partnership or beneficial ownership interest in a partnership or trust,

    ‘(C) any note, bond, debenture, or other evidence of indebtedness,

    ‘(D) any evidence of an interest in, or a derivative financial instrument with respect to, any security or securities described in subparagraph (A), (B), or (C),

    ‘(E) any derivative financial instrument with respect to any currency or commodity, and

    ‘(F) any notional principal contract.

..............

And what would you think is exempted

‘(f) Exceptions-

  •  

      ‘(A) is traded on a trading facility located in the United States, and

      ‘(B) has a fixed maturity of not more than 100 days,

  • ‘(1) EXCEPTION FOR INITIAL ISSUES- No tax shall be imposed under subsection (a) on any covered transaction with respect to the initial issuance of any security described in subparagraph (A), (B), or (C) of subsection (e)(1).

    ‘(2) EXCEPTION FOR CERTAIN TRADED SHORT-TERM INDEBTEDNESS- A note, bond, debenture, or other evidence of indebtedness which--

    shall not be treated as described in subsection (e)(1)(C).

    ‘(3) EXCEPTION FOR SECURITIES LENDING ARRANGEMENTS- No tax shall be imposed under subsection (a) on any covered transaction with respect to which gain or loss is not recognized by reason of section 1058.

Tue, 03/05/2013 - 15:36 | 3301762 myptofvu
myptofvu's picture

This ought to be rich, coming from a guy that says there is no sense at looking at data faster than 1 second increments. I guess everyone with a high speed connection is guilty of HFT then.

Tue, 03/05/2013 - 16:21 | 3301922 otto skorzeny
otto skorzeny's picture

really? have you ever seen the bid/ask on one of your trades from your "high speed connection"-if so then you are a money maker for HFTs.

Tue, 03/05/2013 - 15:38 | 3301767 eclectic syncretist
eclectic syncretist's picture

WHy is it called High Frequency TRADING when there is never any intention to make a trade?

Tue, 03/05/2013 - 15:39 | 3301770 cougar_w
cougar_w's picture

They'll create a task force, bring in a bunch of academics, take testimony from industry big-wigs,and fly around the country visiting co-lo facilities.

Then toward the end of the whole thing the task force chairman will turn to Bernanke and ask, "So are you done goosing the markets yet?"

If he says he is done, HFT will be declared a terrorist Al-Queda plot to undermine our sacred freedoms and all programmers will be shot at dawn.

If he says he is NOT done, then the task force will find that HFT is a useful tool that creates liquidity and stabillizes market action, and close shop.

The above charade will cost taxpayers $25 million.

Tue, 03/05/2013 - 15:41 | 3301779 Dr. Engali
Dr. Engali's picture

Sheesh  four years later and billions squandered....all they had to do is come to the Hedge and they could have gotten the information for free.

Tue, 03/05/2013 - 15:42 | 3301789 Charlie the Chump
Charlie the Chump's picture

Yes that's what we need Frontal Love. Yeah baby!

Tue, 03/05/2013 - 15:43 | 3301790 Brixton Guns
Brixton Guns's picture

FBI = fucking brainless idiots.  If you believe anything Mueller's lackeys have to sell you, I got a few bridges to sell ya.  I wouldnt trust them as far as they can be thrown imho.  Just sayin.

Tue, 03/05/2013 - 15:45 | 3301800 kito
kito's picture

so hft is only bad when chinese banks utilize it???.....kind of reminds me when that goldman employee took off with propreitary trading secrets and goldman proclaimed "it could have negative impacts on the market if used in the wrong hands"..........laugh....my.....ass....off.............

Tue, 03/05/2013 - 15:56 | 3301848 knukles
knukles's picture

Hah ha ha ha ha ha ha ha ha ah.....

Tue, 03/05/2013 - 15:46 | 3301807 Frank N. Beans
Frank N. Beans's picture

obviously the people at the fbi and sec did not get the memo...

 

Tue, 03/05/2013 - 15:48 | 3301814 ziggy59
ziggy59's picture

Hmmmm, call me a skeptic but I just think some poor ETrader, iTrader or some other VowelTrader will be sacfriced for the good, I mean the evil, of the banksters

Tue, 03/05/2013 - 16:02 | 3301863 NotApplicable
NotApplicable's picture

Waddell & Reed, FTW.

fuggin jayhawkers!

Tue, 03/05/2013 - 15:49 | 3301823 Bingfa
Bingfa's picture

Somehow I find this hard to believe.....

Without HFT it all goes bye-bye

Tue, 03/05/2013 - 16:03 | 3301865 NotApplicable
NotApplicable's picture

What's to believe? It's just the latest facade.

Well, other than eliminating any "unfriendlies."

Wed, 03/06/2013 - 04:11 | 3301872 GoinFawr
GoinFawr's picture

Relax, unless you have 'Mom and Pop' in your organisation's moniker nobody is going to give your HF 'trading' strategies, or anything else you and yours might choose to do, a second glance.

Next we'll hear how they're gonna clamp down on naked shorting, again.

I'm with the 'this will provide cover' crowd. Though what it will be providing plausible deniability for this time is still up in the air, IMO.

TPTB pretend to shake the terrible Aegis of accountability at themselves every once in awhile to make you think they're actually interested in the principles of a level playing field, but the bastards of this world only threaten that when the leveling is actually happening, only not in their favour, so they need to legislate the tilt into angling back in their direction.

Eg. I've got money on my flank that says THESE are the people they're really after; the if you can't join 'em, beat 'em crowd.

ZH has time and time again outlined what would be simple, inexpensive, and effective solutions to the HFT problem, but I wouldn't count on those good ideas to even merit mention by 'investigators', let alone be considered for implementation. Besides, as you say,  if the bigshots' skimmers' gravy train was ever tithed, delayed or deferred, even for a second...

 

Tylers, you leave my frontal love out of this.

Tue, 03/05/2013 - 15:50 | 3301829 madcows
madcows's picture

Take it down or give it legitimacy?  It's all a big fraud and the govt. is in on it.

Tue, 03/05/2013 - 15:55 | 3301844 SillySalesmanQu...
SillySalesmanQuestion's picture

A wink, a nod, a slap on the back, handshake ,passing of the envelope, or a wire to an offshore account, a DVD of midget tranny porn, another wink and nod, and magic presto....problem solved and its gone....

Tue, 03/05/2013 - 16:30 | 3301966 DblAjent
DblAjent's picture

midget tranny porn

That's "Little People" Tranny porn.

Tue, 03/05/2013 - 16:01 | 3301861 alien-IQ
alien-IQ's picture

Pardon me while I laugh my ass off.

In order to believe that the SEC and/or the FBI or any government agency for that matter is going to do anything to keep big money from making big money at the expense of the retail investors, you must also believe in:

The Easter Bunny.
The Tooth Fairy.
Santa Claus.
Unicorns.
And a "fair and efficient market".

And as we all know...those are all myths, lies and fairy tales.

Tue, 03/05/2013 - 16:08 | 3301882 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Yes it remains to be seen if this is just some more political kabukake theater for the absurd.

Skeptical yes but maybe Moe might actually deliver something like inflation fraud watered down beer on this one as long as it doesn't involve having to dole out any real justice.

Tue, 03/05/2013 - 16:29 | 3301960 alien-IQ
alien-IQ's picture

There is a better chance of Jessica Alba knocking on my door, stripping naked and blowing me than there is of the SEC/FBI actually doing anything about HFT.

My guess is that, after several years and millions upon millions of dollars worth of "investigation", they will arrive at the conclusion that HFT is actually "good for the markets".

Sorry, I simply have no faith in the Amerikan "justice" system. I see no evidence whatsoever that even remotely suggests that having any faith in it is in any way justified.

I'm not being cynical, I'm just being pragmatic.

Tue, 03/05/2013 - 17:03 | 3302118 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I'm as cynical and pragmatic as they come but when someone steps into a new position they at least earn the chance to disprove the critics (regardless of past performance). Unlike the rest of the chuckleheads Moe is making some noise. Like I said actions and noise are 2 different things. I guess we shall have to disagree because I don't think it is an Amerkan justice system. Frankly I don't think the justice part is broken, it is the people who are put in place to administer it that are the problem. How they get put in is what is broken.

Tue, 03/05/2013 - 16:04 | 3301871 Freedumb
Freedumb's picture

And I can't wait to see the faces of the HFT's out there when the SEC smacks them down after concluding their 5 year investigation with a business crushing cumulative $10 mil fine

Tue, 03/05/2013 - 16:14 | 3301889 Widowmaker
Widowmaker's picture

Propaganda brought to you by the departments of bullshit and horseshit.

According to loyal Bushie Chris Cox, the only thing assured is criminals stay out of jail and incorporated crimes get swept under the rug.

In other words, insulating corruption from discovery - nothing else.

Mark this post, NO PROSECUTIONS!

Tue, 03/05/2013 - 16:14 | 3301899 q99x2
q99x2's picture

You start by turning off the power to the floor of HFT computers beneath the Stock Exchanges. And then you have to find someone that is willing to buy more than a share two of that shit they call stock.

Tue, 03/05/2013 - 16:14 | 3301900 EclecticParrot
EclecticParrot's picture

Uh, great.  Looks like Tennessee Tuxedo and Chumley should have great success with this project ...

Tue, 03/05/2013 - 16:17 | 3301904 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I guess we are going to find out if the FBI is a joke also like the DOJ when this all finally plays out.

I'll at least concede credit to Moe for trying to keep up appearances with the SEC. Making noise and real action are 2 different things. The second one remains to be seen.

Tue, 03/05/2013 - 16:32 | 3301977 DblAjent
DblAjent's picture

The Feebs will be conducting this investigation remotely

they literally have no gas budget and are carpooling agents

Tue, 03/05/2013 - 16:44 | 3302002 earleflorida
earleflorida's picture

the words 'criminal intent' have been expunged from the amerikana lexicon, regarding a anachronistic anomalous acquiesencent... this feutalistic abandonment via Le`laissez faire-- a`pecora moment' incapsulated in a tyme'd justice vacuum-- served and severed?cold... but, somehow we're removed from this outdated, and inverted truncated truth?! 

'how quaint is ignorance when all consume at the same trough of greed... this poisoned well, weight'd upon fear, and the absurdity of advarice-- yet, fetal`d in conveyance... that of a Mare's-nest nigh, whence the abattoir dawns on the horizon of self-indulged myopic vacuity'

jmo

thankyou Tyler 

Tue, 03/05/2013 - 16:47 | 3302056 orangegeek
orangegeek's picture

I'd feel more assured something credible would happen if the SEC/FBI would include Curly, Larry and Moe as part of their investigation team.

Tue, 03/05/2013 - 16:54 | 3302089 Headbanger
Headbanger's picture

Fantastic!   Made my day!

 

Tue, 03/05/2013 - 17:02 | 3302111 MrBoompi
MrBoompi's picture

Yes. Looks to me they just want to shake out the "non-authorized" cheats. TPTB don' t like competition.

Tue, 03/05/2013 - 17:03 | 3302121 outamyeffinway
outamyeffinway's picture

The only power the FBI has anymore is to harass the public. They themselves know all too well that they are fangless and support the status quo. Fuck them.

 

If I was president, the first thing I would do is shut down the SEC. These ass hats are collecting pay out of the public till and protecting the establishment from the light of day.

 

Blowback is coming bitches. There will be hell to pay. Of course my words mean nothing in the face of such hubris but time and history proves they are FUBAR.

Tue, 03/05/2013 - 17:03 | 3302122 NoWayJose
NoWayJose's picture

I did think that this was kind of a joke, as the SEC is 'supposed' to be the experts(?) on this kind of thing.  If the FBI really wants to shake things up it would investigate all the SEC employees that walk across the street to a big Wall Street firm.  But anyway, I wonder if the SEC is noticing that not all of the HFTs are being driven by American traders - and in fact, foreign backed HFTs are actually sucking money out of the United States.  This also makes me wonder if perhaps the Chinese are the ones slamming paper gold, so that they can pick up physical by the ton.  So perhaps the FBI is really looking at where the HFTs are attacking from?  The only other explanation I can think of is that the SEC knows that the house of cards is about to collapse (again), and wants the FBI involved in order to cover their butts.  I'm sure that the SEC doesn't want to be called up into Congress and be asked "You didn't see the collapse in 2008 coming, and now you say you didn't see the collapse of 2013 coming - so what is it that you do at the SEC?"

Tue, 03/05/2013 - 18:00 | 3302332 The Heart
The Heart's picture

Thank you.

For a recovering fluoride addict who is now able to clearly see, this is good truth.

The obvious truth to those who could actually make some changes should be obvious to them all.

Fear is the food for the mind. Truth is the food for the Heart.

Walk by the rites of God, not by those of man!

Tue, 03/05/2013 - 18:25 | 3302495 Crash Overide
Crash Overide's picture

Is someone is beating them at their own game, they don't like competition.

Also...

"and now you say you didn't see the collapse of 2013 coming - so what is it that you do at the SEC?"

*insert porn joke here*

Tue, 03/05/2013 - 17:05 | 3302127 They Tried to S...
They Tried to Steal My Gold's picture

And what happens when their investigations lead them to the FED? 

"To Ridiculous to Jail?"

Tue, 03/05/2013 - 17:20 | 3302180 Catullus
Catullus's picture

FBI? Really?

Did they get stiffed on some blackmail attempt where they think they have smoking gun email about blah blah blah? The only hope is that someone has an algo that someone on a email chain forwarded around and idiotically explained what it actually does and how they would use it.

The FBI is not going to catch anyone except dumb people.

Tue, 03/05/2013 - 22:23 | 3303384 earleflorida
earleflorida's picture

http://www.muckety.com/J-Edgar-Hoover/4187.muckety

http://www.muckety.com/Paul-Harvey/146556.muckety

http://www.muckety.com/Leon-E-Panetta/2089.muckety

*** Panetta was a Nixon guy, a BOD member for six[6]years on the NYSE... a total bootlicker asswipe! Why am I mentioning these few selected idiots? The entire FBI, CIA, MIC, State Dept., Defense Dept. are all hand picked from a incestual bag of dung... that's Y!!!

Ps. Lucky Luciano from the ?nfamous Genovese Crime Family was the smartest of all the bosses. Prostitution and Gambling was his chosen forte?! He used to set up/fix-up J. Edgar Hoover with 'Big Cock Male Prostitutes' while Hoover was dressed in drag. Lucky blackmailed the bunch, especially Hoover with big cocks in his mouth photos... nice! 

jmo

FBI & SEC = don't rock that pension boat?!

Tue, 03/05/2013 - 17:30 | 3302215 HowardBeale
HowardBeale's picture

"FBI And SEC Team Up To Take Down HFT"

 

Why am I having visions of a cat chasing its tail...

Tue, 03/05/2013 - 19:53 | 3302713 monad
monad's picture

I have a vision of Corzine on a tropical beach with 2-3 hot sex therapists, sucking a frosty pina colada out of a coconut.

Tue, 03/05/2013 - 18:00 | 3302340 Blagio
Blagio's picture

HFT will be completely legal and exonerated for any trading "malfunctions" within two years as the elite use this in their bag of tools for easy profit.

 

"You asked for a miracle... I give you the F.B.I." - Hans Gruber

 

Tue, 03/05/2013 - 18:06 | 3302380 Chippewa Partners
Chippewa Partners's picture

Hey boys and girls don't worry.  The AGENTS working that detail will be furloughed one day a pay period between April and September of this year anyway.

Justice moves slow especially with Obama, Holder and now Mary Jo.   Let me correct that.  There is no justice with Obama and Holder.  There, fixed it. 

Americans should not be tempted by insider trading or to game the system with HFT but instead look up to the great institutions that engage in perfectly legal theft.   Institutions like Congress and the Fed. Let's hope Mary Jo doesn't take anything from the Arthur Levitt playbook.  His track record of exemptions for Enron;  no need to expense stock options; Madoff; just a captured regulator who loved GS! 

Why not let Greg Smith sort it out..........

 

 

Tue, 03/05/2013 - 18:07 | 3302387 slobbermut
slobbermut's picture

See.....it really is safe - the FBI is involved!   Yeah right - isn't this the same group of lackey stooges which 'determined' Flight 800 was NOT downed by a missile, though numerous persons, including military and ex-military, actually saw the missile?  Oh boy....now we will have a level playing field.  What a laugh.....go put J. Corzine behind bars and I might entertain the possibility that somebody is truly serious.

Tue, 03/05/2013 - 18:18 | 3302451 Clowns on Acid
Clowns on Acid's picture

When does the outlawing of short selling start ?

Tue, 03/05/2013 - 18:22 | 3302479 MedicalQuack
MedicalQuack's picture

They better hire some "Anti-quants"...takes one to know one and some former or current programmers too so we cover the code. 

Tue, 03/05/2013 - 18:51 | 3302605 Bansters-in-my-...
Bansters-in-my- feces's picture

For them to even announce it ,you know the whole thing is a fucking joke.

USA should think of getting a Justice Department.

Just a thought.

Tue, 03/05/2013 - 19:19 | 3302724 monad
monad's picture

USDIY

Tue, 03/05/2013 - 19:16 | 3302697 monad
monad's picture

They just need about 85B to get this show to started. They still haven't gone after the people who shorted AA for 911.

Tue, 03/05/2013 - 20:21 | 3302944 Rick Blaine
Rick Blaine's picture

This will be a hoot.

Tue, 03/05/2013 - 22:32 | 3303380 highwaytoserfdom
highwaytoserfdom's picture

Laughable..   FBI  and SEC?    How about enforcement of something as simple as tax evasion and,  I don't know simple thief laws and SEC rules...   Can start with enforcing the SEC regulations and the K street mafia that has stolen the wealth of the nations...   How can offshore banks, percentage of foreign earned income on taxes be legal?  There not!   No one in jail for 1998, Libor, Mf Global, reparation funds paid for tax evasion....    Plenty of criminals no policing on the important issues...... Hey how about the ERISA oligopoly criminal set up? 

Tue, 03/05/2013 - 23:20 | 3303575 matrix2012
matrix2012's picture

Now you can trade all the stawks with peace of mind,

knowing there won't be any HFT market rigging! Quite trustworthy.

 

BULLISH ;) ha ha ha

Tue, 03/05/2013 - 23:55 | 3303670 Youri Carma
Youri Carma's picture

"After exposing the stock market manipulative arsenal that is High Frequency Trading,
- Quote Stuffing
- Flash Trading
- Packet Churning
- Layering
- Sub-Pennying
- Liquidity
- Latency and Dark Pool Arbitrage
- NBBO and Reg NMS exemptions,
- Hide-Not-Sliding
- Collocation
and much, much more for four years …"

- Front Running

Wed, 03/06/2013 - 01:09 | 3303806 22winmag
22winmag's picture

Am I to take this seriously?

Wed, 03/06/2013 - 04:12 | 3304015 dunce
dunce's picture

Every one of the HFT players will turn out to be on obamas big donor list and immune from prosecution.

Wed, 03/06/2013 - 12:30 | 3305035 patb
patb's picture

why not simply place a one basis point tax on every Buy, Sell Order placed into the market

and place a 10 basis point tax on every order cancelled.

 

 

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