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Full Scapegoat Retard: Trader Arrested For 2010 Flash Crash

Tyler Durden's picture




 

Remember when the SEC, and specifically the agency's former lead HFT investigator Greg Berman, blamed the entire May 2010 Flash Crash on Waddell & Reed (and not HFT)? Well, it is time to change the entire narrative once again, in yet another attempt to 'restore" confidence in a rigged and manipulated market. The scapegoat? Navinder Singh Sarao.

  • FUTURES TRADER ARRESTED FOR ALLEGED ROLE IN 2010 FLASH CRASH
  • FUTURES TRADER CHARGED WITH ILLEGALLY MANIPULATING STOCK MKT
  • SARAO HAS BEEN CHARGED WITH COMMODITIES, WIRE FRAUD: GOELMAN
  • SARAO WAS ARRESTED AT HIS HOME IN LONDON TODAY, GOELMAN SAYS
  • CFTC FILES CIVIL CASE AGAINST NAVINDER SINGH SARAO

But wait, it gets better:

  • SARAO REAPED $40 MILLION IN PROFITS, CFTC'S GOELMAN SAYS
  • SARAO SPOOFED E-MINI FUTURES FROM 2010 THROUGH 2014: GOELMAN

And the punchline:

  • GOELMAN: SARAO WAS `SIGNIFICANTLY RESPONSIBLE' FOR FLASH CRASH

From the report:

So, uh, 5 years later we find that the SEC was only kidding about that whole Waddell & Reed farce, and that this time it actually has the right perpetrator.  Or is it simply that one can't arrest an algo or a vacuum tube.

In any event, the market is now unrigged and unmanipulated dear retail investors, and the water is warm. Pretty please, because the banks, HFTs and hedge funds are desperate to sell some of the trillions in stock they have bought on the way up and without you there is nobody to sell to.

In other news, Jon Corzine's Vapor Capital Mismanagement has broken off its merger with Nav Sarao Futures Limited PLC.

Also please ignore the "fact" that we now trade in a world in which one (1) person can break the entire market.

* * *

Also, please ignore, or best of all forget, that a year ago the SEC launched an investigation into whether Virtu and every other major HFT firm was engaged in layering and spoofing:

The U.S. Securities and Exchange Commission has been seeking information on 10 registered broker dealers as part of an ongoing investigation into high-frequency trading strategies, according to an internal SEC document reviewed by Reuters.

 

The regulator told its staff in late March that it was interested in seeing any tips, complaints, or referrals that they receive concerning the brokers and high frequency trading.

 

The firms listed are Allston Trading LLC; Hudson River Trading LLC; Jump Trading LLC; Latour Trading LLC, which is an affiliate of Tower Trading; Merrill Lynch, Pierce, Fenner & Smith, owned by Bank of America Group; Octeg LLC, which has been merged into a unit of KCG Holdings Inc; Tradebot Systems Inc; Two Sigma Investments LLC; Two Sigma Securities LLC; and Virtu Financial.

 

They are all some of the largest trading firms in the U.S. Allston and Jump are both based in Chicago. Hudson River, Latour, Merrill, Two Sigma, and Virtu are headquartered in New York. KCG is in Jersey City, New Jersey, and Tradebot is based in Kansas City, Missouri.

 

Jump, Latour, Bank of America, Hudson River, Tradebot and KCG declined to comment. The other firms did not immediately respond to a request for comment.

 

Their number and the open-ended quest for information shows that the SEC is casting a wide net as it looks to unearth wrongdoing in the marketplace. It is not known if the SEC found any violations of securities laws at any of the firms. The SEC declined to comment.

 

A number of government agencies, including the SEC, New York State Attorney General Eric Schneiderman’s office, the Commodity Futures Trading Commission and the Federal Bureau of Investigation have said they had active probes into high-speed and automated trading.

 

The SEC has been seeking evidence of abuse of order types, as well as traditional forms of abusive trading like "layering" or "spoofing" and other issues relating to high-frequency trading that might be violations of the law, SEC Director of Enforcement Andrew Ceresney told Reuters in May (reut.rs/1kwSqF5).

 

Spoofing and layering are tactics where traders places orders that they cancel before they are executed to create the false impression of demand, aiming to trick others into buying or selling a stock at the artificial price.

 

High frequency trading firms account for more than half of all trades in the U.S. stock market, and are often seen as modern-day market makers. They make it easier for investors to trade by stepping in and taking the other sides of many orders and profiting off of trading spreads.

 

Scrutiny around high-frequency trading intensified following the March 31 release of best-selling author Michael Lewis' book, "Flash Boys: A Wall Street Revolt." In the book, Lewis contends that high-frequency traders have rigged the stock market, profiting from speeds unavailable to others.

We are confident these firms did nothing at all wrong.

* * *

All joking aside, at least the CFTC finally figured out that it at least has to blame spoofing, layering, momentum ignition and every other aspect of HFT market manipulation on what Sarao was "doing." In fact, allegedly Sarao was doing this until a few weeks back, which suggests that not only one person crashed the market, but one person was responsible for manipulating it all the way to where it is now.

And yes, we are still laughing, because for the CFTC and DOJ to have the gall to actually bring up this charge against one person, indicates just how broken things really must be.

Then again, it was inevitable: just like the housing crash was blamed on 28-year-old Goldmanite Fabrice Tourre, so the Flash Crash had to be blamed on one person too.

One thing is certain though: when the entire rigged, fraudulent, manipulated market crashes and burns one final time, it will all be the HFTs' fault (as we have been saying since 2013), and not the central banks and their $22 trillion (more than the GDP of the US and Japan) in assets.

And who can't wait for an algo perp walk.

* * *

Here is the evil masterming behind all that was broken and rigged in the S&P for the past 5 years:

* * *

here is the entire farce, straight from the CFTC:

CFTC Charges U.K. Resident Navinder Singh Sarao and His Company Nav Sarao Futures Limited PLC with Price Manipulation and Spoofing

The CFTC Complaint Alleges that Defendants’ Manipulative Conduct Contributed to the Market Conditions that Led to the May 6, 2010 Flash Crash

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the unsealing of a civil enforcement action in the U.S. District Court for the Northern District of Illinois against Nav Sarao Futures Limited PLC (Sarao Futures) and Navinder Singh Sarao (Sarao) (collectively, Defendants).  The CFTC Complaint charges the Defendants with unlawfully manipulating, attempting to manipulate, and spoofing — all with regard to the E-mini S&P 500 near month futures contract (E-mini S&P). The Complaint had been filed under seal on April 17, 2015 and kept sealed until today’s arrest of Sarao by British authorities acting at the request of the U.S. Department of Justice (DOJ).  After the arrest, the DOJ unsealed its own criminal Complaint charging Sarao with substantively the same misconduct. 

The Standard & Poor’s 500 Index is an index of 500 stocks designed to be a leading indicator of U.S. equities.  The E-mini S&P 500 is a stock market index futures contract based on the Standard & Poor’s 500 Index and is one of the most popular and liquid equity index futures contracts in the world.  The contract is traded only at the Chicago Mercantile Exchange (CME). 

According to the Complaint, for over five years and continuing as recently as at least April 6, 2015, Defendants have engaged in a massive effort to manipulate the price of the E-mini S&P by utilizing a variety of exceptionally large, aggressive, and persistent spoofing tactics.  In particular, according to the Complaint, in or about June 2009, Defendants modified a commonly used off-the-shelf trading platform to automatically simultaneously “layer” four to six exceptionally large sell orders into the visible E-mini S&P central limit order book (the Layering Algorithm), with each sell order one price level from the other.  As the E-mini S&P futures price moved, the Layering Algorithm allegedly modified the price of the sell orders to ensure that they remained at least three or four price levels from the best asking price; thus, remaining visible to other traders, but staying safely away from the best asking price.  Eventually, the vast majority of the Layering Algorithm orders were canceled without resulting in any transactions.  According to the Complaint, between April 2010 and April 2015, Defendants utilized the Layering Algorithm on over 400 trading days. 

The Complaint alleges that Defendants often cycled the Layering Algorithm on and off several times during a typical trading day to create large imbalances in the E-mini S&P visible order book to affect the prevailing E-mini S&P price.  Defendants then allegedly traded in a manner designed to profit from this temporary artificial volatility.  According to the Complaint, from April 2010 to present, Defendants have profited over $40 million, in total, from E-mini S&P trading.

As alleged in the Complaint, Defendants were exceptionally active in the E-mini S&P on May 6, 2010, commonly known as the Flash Crash Day.  On the afternoon of that day, the E-mini S&P market price suffered a sharp decline, followed shortly thereafter by sharp declines in the prices of other major U.S. equities indices and individual equities.  After a few minutes, markets quickly rebounded to near previous price levels.  According to the Complaint, Defendants utilized the Layering Algorithm continuously, for over two hours, immediately prior to the precipitous drop in the E-mini S&P price, applying close to $200 million worth of persistent downward pressure on the E-mini S&P price.  According to the Complaint, Defendants’ manipulative activities contributed to an extreme E-mini S&P order book imbalance that contributed to market conditions that led to the Flash Crash.

The Complaint further alleges that Defendants engaged in a variety of other manual spoofing techniques whereby Defendants allegedly would place and quickly cancel large orders with no intention of the orders resulting in transactions.  At times, according to the Complaint, this manual spoofing was used to exacerbate the price impact of the Layering Algorithm.

CFTC Director of Enforcement Aitan Goelman commented: “Protecting the integrity and stability of the U.S. futures markets is critical to ensuring a properly functioning financial system.  Today’s actions make clear that the CFTC, working with its partners on the criminal side, will find and prosecute manipulators of U.S. futures markets wherever they may be.”

In its ongoing litigation, the CFTC is seeking permanent injunctive relief, disgorgement, civil monetary penalties, trading suspensions or bans, and payment of costs and fees.  

As noted above, the U.S. Department of Justice filed a related criminal action charging Sarao with manipulation, attempted manipulation, spoofing, and wire fraud on February 11, 2015, in the U.S. District Court for the Northern District of Illinois.  In conjunction with that action, the Federal Bureau of Investigation (FBI), with the assistance of Scotland Yard and the U.K.’s Financial Conduct Authority (FCA), took Sarao into custody today, at his residence in London.  Sarao awaits extradition to the United States on these charges.

Given Defendants’ ongoing unlawful conduct and the potential for dissipation of Defendants’ ill-gotten gains, on April 17, 2015, U.S. District Judge Andrea R. Wood issued an Order freezing and preserving assets under Defendants’ control and prohibiting them from destroying documents or denying CFTC staff access to their books and records.  The Court has scheduled a hearing for May 1, 2015, on the CFTC’s motion for a preliminary injunction. 

The CFTC thanks and acknowledges the assistance of the CME, the U.S. Department of Justice, the FBI, the FCA, Scotland Yard, and the Securities and Exchange Commission. 

CFTC Division of Enforcement staff members responsible for this matter are Jeff Le Riche, Jo Mettenburg, Jenny Chapin, Jessica Harris, Allison Sizemore, Carlin Metzger, Elizabeth Padgett, Mary Lutz, Jeri Cobb, Jordon Grimm, and Charles Marvine. 

* * *

The full "charge"

 

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Tue, 04/21/2015 - 13:13 | 6015009 undercover brother
undercover brother's picture

Because citidel is too big to fail.

Tue, 04/21/2015 - 13:18 | 6015026 Hype Alert
Hype Alert's picture

Because crashing market is bad, slowly boiling the muppets is good.  Crashing the market pulls back the curtain and exposes the ability to move the market.  Very bad!

Tue, 04/21/2015 - 13:21 | 6015046 Arius.
Arius.'s picture

retard?  not really ... most likely smt coming up and the powers to be are flashing an ALERT to potential law breakers

Tue, 04/21/2015 - 13:31 | 6015094 Pinto Currency
Pinto Currency's picture

 

 

When will Larry Summers and Robert Rubin be arrested?

Tue, 04/21/2015 - 13:42 | 6015133 NoDebt
NoDebt's picture

"In other news, Jon Corzine's Vapor Capital Mismanagement has broken off its merger with Nav Sarao Futures Limited PLC."

Drat.  I had money down on that merger going through.  Steve Cohen told me it was a "lock".

Tue, 04/21/2015 - 13:49 | 6015176 pods
pods's picture

Dude shoulda added -stein to his name.  

That guy must have some fast ass fingers!  

pods

#NottaCheesepope

Tue, 04/21/2015 - 13:57 | 6015205 BaBaBouy
BaBaBouy's picture

PHEWE ... Sacks et Al Dodges Another Bullet... er Missile...

Tue, 04/21/2015 - 14:01 | 6015221 Henry Rearden
Henry Rearden's picture

The guy's only true misstep was making this a sell algorithm.  If only he had the other bias, he would probably have been promoted to the Federal Reserve Trading desk. 

Tue, 04/21/2015 - 14:04 | 6015239 SWRichmond
SWRichmond's picture

FUTURES TRADER CHARGED WITH ILLEGALLY MANIPULATING STOCK MKT

Because, like counterfeiting, when we do it, it is legal, OK, and a good thing, necessary, and in the public interest.  But when YOU do it, it is illegal, very very bad, destructive, and contrary to everything that is American and free market.

Tue, 04/21/2015 - 14:06 | 6015247 Henry Rearden
Henry Rearden's picture

The guy would have received the Medal of Freedom if it was a buy algo. 

Tue, 04/21/2015 - 15:11 | 6015508 Occident Mortal
Occident Mortal's picture

What he did is incredibly easy to do.

In fact... In a public market with 1% margin requirements almost ANYBODY ON THE PLANET can do this.

To suggest that a $200m sell order (probably backed with <$5m on account) can manipulate and crash the S&P 500 is so FUCKING ABSURD it defies all credibility.

If that's all it takes to sink the market WE DONT HAVE A MARKET.

Which I think is Tyler's point. I mean come on!!! Who are the Feds trying to convince here?? It's like pinning Pearl Harbour on some kids playing with illegal fireworks.

Yes what they were doing is wrong... But are you FUCKING SERIOUS?!?

Tue, 04/21/2015 - 16:44 | 6015869 sgt_doom
sgt_doom's picture

Great comments, Occcident Mortal, and this brins to mind all those dismissed lawsuits against the DTCC and their Stock Borrow Program --- their reasonsing sounds against those lawsuits (really nonsensical) sounds like the DOJ's reasoning for this arrest?

No logical constructs there. . . .

(And it was the CFTC, under Gary Gensler, which did the study proving that 90% of commodity trades were speculation only.)

Tue, 04/21/2015 - 16:51 | 6015892 eatthebanksters
eatthebanksters's picture

This is to distract the public from Corzine opening his new 'Vapor' hedge fund.  UFB...not one banker prosecuted, Corzine is free but this poor fucker draws POTUS's wrath for some reason.

Tue, 04/21/2015 - 17:30 | 6016037 Pinto Currency
Pinto Currency's picture

 

 

When will Bill Clinton be arrested?

Tue, 04/21/2015 - 16:50 | 6015890 McMolotov
McMolotov's picture

Just a heads up, I've seen several comments elsewhere that basically went, "If one guy can do this much damage, imagine what the Russians/Iranians/Chinese/Martians could do!!!" The comments were all worded about the same way, which was a bit odd.

Crack-pot theory alert: Methinks someone might be laying the foundation for blaming the inevitable crash of the markets on a foreign power.

Tue, 04/21/2015 - 16:55 | 6015904 IndyPat
IndyPat's picture

Would be an easy sell.

If they can sell that Sony/NORK bullshit...coupled with the shit that was highlighted above, I think you could be right.

Tue, 04/21/2015 - 14:07 | 6015249 strannick
strannick's picture

Banker lackeys everywhere. Load your usb drives with evidence, cause your next. If they dont ''suicide you'' first.

Tue, 04/21/2015 - 15:11 | 6015506 johngaltfla
johngaltfla's picture

How the hell this guy wasn't the head of floor trading and HFT at GS is beyond me.

Tue, 04/21/2015 - 16:48 | 6015886 disabledvet
disabledvet's picture

Hard to tell what's funnier actually.

 

"One guy did it" or "this is illegal now."

Tue, 04/21/2015 - 14:02 | 6015224 The Limerick King
The Limerick King's picture

 

 

Three Cheers to the CFTC
They collared that bad HFT
Spoofing and layering
His actions were daring
The markets are fixed...GLORY BE!!!

Tue, 04/21/2015 - 14:25 | 6015208 Bay of Pigs
Bay of Pigs's picture

And where was Gary Gensler (Jewish and former Goldman Sachs partner) during this time? Oh yeah, running the corrupt and fraud ridden CFTC.

FREE Bart Shillton?

Edit: And another gem about this cocksuckers past over at the UST...

"As Undersecretary of the Treasury for Domestic Finance, Gensler advised and assisted Treasury Secretaries Robert Rubin and Lawrence Summers on all aspects of domestic finance, including formulating policy and legislation in the areas of financial institutions, public debt management, capital markets, government financial management services, federal lending, fiscal affairs, government sponsored enterprises, and community development."

http://en.wikipedia.org/wiki/Gary_Gensler

Tue, 04/21/2015 - 14:59 | 6015456 Grinder74
Grinder74's picture

Bill Gross told me it was the "short of a lifetime".

Tue, 04/21/2015 - 13:37 | 6015116 DeadFred
DeadFred's picture

Algos don't like to read the word flashcrash, it makes them nervous

Tue, 04/21/2015 - 15:14 | 6015518 MrTouchdown
MrTouchdown's picture

They arrested the helpdesk guy. Dude can't even change a busted monitor out in less than a month, how's he going to fix the markets?

 

/s

Tue, 04/21/2015 - 13:22 | 6015051 Latina Lover
Latina Lover's picture

At this rate, all the banksters will be dead before they are held to account.  Or, perhaps, the idea is to throw a few pieces of red meat to the dogs while giving the owners a free pass.

Tue, 04/21/2015 - 13:26 | 6015068 SoilMyselfRotten
SoilMyselfRotten's picture

CFTC files Civil case

 

Whpppppeeeefuckindoo

Tue, 04/21/2015 - 13:35 | 6015104 TheFourthStooge-ing
TheFourthStooge-ing's picture

CFTC Magic 8-Ball says: settlement, fine, no admission of wrongdoing.

Next...

Tue, 04/21/2015 - 14:04 | 6015225 Henry Rearden
Henry Rearden's picture

No way, this is one single guy who doesn't work for a too big to fail institution.  They are going to throw the book at him.  He might go to jail for...gasp...5 whole years!

 

In all seriousness, he will be banned from trading anything for the rest of his life.

Tue, 04/21/2015 - 14:35 | 6015369 junction
junction's picture

Most importantly, does this guy have a "fat finger?" If not, as Jimmy Cochran once said, "If it doesn't fit, you must acquit."   

Tue, 04/21/2015 - 13:19 | 6015038 Buckaroo Banzai
Buckaroo Banzai's picture

Financial Industry Scapegoating 101: If You're Brown, You're Going Down!!

Tue, 04/21/2015 - 13:29 | 6015082 McMolotov
McMolotov's picture

"They're trying to make me an escape goat. If I am fired, I swear to God that every single piece of copier paper in this town is going to have the F-word on it. The F-word. You have one day."

—Michael Scott

Tue, 04/21/2015 - 16:17 | 6015778 Bob
Bob's picture

That's what he said. 

Tue, 04/21/2015 - 14:23 | 6015313 permarig
permarig's picture

In other news, Navinder Singh Sarao has also caused a winning trade ratio of 99.999% for Virtu Financial.

 

Tue, 04/21/2015 - 13:58 | 6015210 undercover brother
undercover brother's picture

Just occured to me that if this cftc patsy takes the heat and does his time quietly, his payoff will likely be a job a citidel.  

Tue, 04/21/2015 - 16:00 | 6015697 raywolf
raywolf's picture

what a joke.... ooooohhh... he made $900k in one day in the crash... OMG... what a manipulator.... i am sure many real traders make more than that in a day.... every day..... this legal claim is completely sick....

Tue, 04/21/2015 - 16:52 | 6015898 sgt_doom
sgt_doom's picture

Saaaay....didn't Benjy Bernanke just announce he's going to work for them????? (Citadel, I mean?)

Tue, 04/21/2015 - 16:58 | 6015916 ZH Snob
ZH Snob's picture

shouldn't he be getting a promotion and a raise?

Tue, 04/21/2015 - 17:15 | 6015980 sgt_doom
sgt_doom's picture

A great review by Nomi Prins on Janet Tavakoli's latest book --- highly recommended since both the book, and review, cover some interesting and current stuff:

http://www.nomiprins.com/thoughts/2015/4/20/decisions-life-and-death-on-wall-street-by-janet-m-tavakoli.html

And speaking of market rigging, don't neglect Erin Arvedlund's outstanding book on the LIBOR rigging:  Open Secret.

Tue, 04/21/2015 - 13:17 | 6015022 fockewulf190
fockewulf190's picture

The only reason why the water is warm is because the Fed has been pissing in the pool nonstop.

Tue, 04/21/2015 - 13:18 | 6015024 buzzsaw99
buzzsaw99's picture

another brown skinned scapegoat, what are the odds of that?

Tue, 04/21/2015 - 13:36 | 6015056 williambanzai7
williambanzai7's picture

Evidently pretty high.

According to a Harvard study, all of the fraudulent activity in the financial markets are conducted by Indians, Pakistanis and West Africans aided and abetted by Eric Estrada and the now defunct WWF.

Our markets are so robust that one clever Indian armed with a netbook can take the whole thing down single handedly.

Tue, 04/21/2015 - 13:21 | 6015025 williambanzai7
williambanzai7's picture

Free Waddell & Reed!

AKA let's sue the SEC for slander...

Tue, 04/21/2015 - 13:22 | 6015053 fockewulf190
fockewulf190's picture

Non Toxic?  I doubt it.

Tue, 04/21/2015 - 13:28 | 6015079 SoilMyselfRotten
SoilMyselfRotten's picture

Why do those 2 look eerily like Max Keiser???

Tue, 04/21/2015 - 13:31 | 6015093 williambanzai7
williambanzai7's picture

LOL!

Tue, 04/21/2015 - 13:50 | 6015187 Dr. Engali
Dr. Engali's picture

Max Keiser is an idiot. I wrote him off long ago when he said that people opposed Obama because they are racist. Once he said that I gave him the big fuck you asshole. Never listened to him again.

Tue, 04/21/2015 - 13:57 | 6015207 WTFUD
WTFUD's picture

We all make mistakes Doc! For every 1 he makes , he calls 19 correct.

P.S Didn't down you. Give him another chance.

Tue, 04/21/2015 - 14:03 | 6015227 Bay of Pigs
Bay of Pigs's picture

Bullshit. Keiser and his mouthy wife Stacy gave me nothing but a hard time (on YouTube) when I pointed out his whole "Buy Silver, Crash JPM" campaign was stolen from ZH's own, Mr Lennon Hendrix.

It was all documented here long ago. The dude is a clown.

Tue, 04/21/2015 - 15:04 | 6015476 NotApplicable
NotApplicable's picture

Not only that, he was likely trying to help JPM "Corzine" people by playing in the Comex space. (as they were the true winners on that MFG day)

Tue, 04/21/2015 - 14:16 | 6015235 Dr. Engali
Dr. Engali's picture

I can't stand a person who falls back on racism whenever there is opposition. To me it speaks to their lack of intellect and the shallowness of their arguments. I listened to max regularly up until that day. Shit like that rubs me the wrong way.

Tue, 04/21/2015 - 15:02 | 6015464 NotApplicable
NotApplicable's picture

He also did nothing BUT character assasination when he smeared Austrian Economics and Mises. Tom Woods called him out on his idiocy, but all Max could do as a rebuttal was to call names. Not once did he ever attempt to address a single issue.

That was the day I realized he was just another lying, media shill of a scumbag.

Wed, 04/22/2015 - 04:35 | 6017347 tocointhephrase
tocointhephrase's picture

Maxcoin lulz

Tue, 04/21/2015 - 15:05 | 6015484 NotApplicable
NotApplicable's picture

Puppets always seem to have a vague similarity. Max is no exception.

Tue, 04/21/2015 - 17:01 | 6015933 ZH Snob
ZH Snob's picture

because they all have the wide-eyed, coke binge look.

Tue, 04/21/2015 - 13:19 | 6015029 JLee2027
JLee2027's picture

Statue of limitations is usually 3 years for civil cases. 

Tue, 04/21/2015 - 13:45 | 6015156 NoDebt
NoDebt's picture

"According to the Complaint, for over five years and continuing as recently as at least April 6, 2015..."

 

Tue, 04/21/2015 - 15:03 | 6015468 Grinder74
Grinder74's picture

LOL.  

 

"That guy threatened to kill me four years ago!!!!"

   "Sorry, statute of limitations is three years."

"But I felt scared yesterday!!!!!!!!!"

   "Well, in that case, arrest that Mo-Fo!!!!"

Tue, 04/21/2015 - 13:19 | 6015033 agstacks
agstacks's picture

Well, we can now drop the whole, "markets are manipulated" thing now that we caught him. 

 

\s

Tue, 04/21/2015 - 14:36 | 6015372 booboo
booboo's picture

Thank god they caught him, we can all rest easier now that this sordid chapter in our life is over. Wait, maybe it should be "this chapter in our sordid life" I'm confused

Tue, 04/21/2015 - 15:56 | 6015680 Max Cynical
Max Cynical's picture

So everything is fixed now?

Should I go all in?

Tue, 04/21/2015 - 13:19 | 6015034 Thisisbullishright
Thisisbullishright's picture

The S&P is now up for the day so all is well...

Go back to sleep and be assured there is nothing to worry about....

Tue, 04/21/2015 - 13:19 | 6015037 yogibear
yogibear's picture

LOL, fall guy. To set an example. The bigger fish are let go.

Criminal banking at it's best.

Tue, 04/21/2015 - 13:42 | 6015091 SoilMyselfRotten
SoilMyselfRotten's picture

Yes Yogi, it's Bizzaro World time. Catch and release the big fish while those little fish end up on the grill.

Tue, 04/21/2015 - 13:20 | 6015040 CL Spec
CL Spec's picture

Poor guy had the wrong last name.

Tue, 04/21/2015 - 13:20 | 6015041 kchrisc
kchrisc's picture

They arrested Corzine?!

Liberty is a demand. Tyranny is submission.

Tue, 04/21/2015 - 13:22 | 6015048 Squid Viscous
Squid Viscous's picture

Goelman and Berman are watching out for us gentiles ... I can sleep more soundly tonight knowing that 

Tue, 04/21/2015 - 13:23 | 6015055 Kaiser Sousa
Kaiser Sousa's picture

CONfidence has now been restored...

"hello, E-Trade..."

 

 

not.

Tue, 04/21/2015 - 13:23 | 6015058 WTFUD
WTFUD's picture

5 years! Gives us hope for 9/11 Perpatrators.

Tue, 04/21/2015 - 13:29 | 6015085 Squid Viscous
Squid Viscous's picture

I think you're spelling is off, it's Perpetraitors

Tue, 04/21/2015 - 13:59 | 6015213 WTFUD
WTFUD's picture

Cheers Squid.

Tue, 04/21/2015 - 13:23 | 6015059 TonyStewart14
TonyStewart14's picture

Funny how nobody seems to investigate manipulation when the manipulation causes the market to go higher.  I guess that type of manipulation is not only permissible but encouraged. 

Tue, 04/21/2015 - 13:50 | 6015182 NoDebt
NoDebt's picture

That's why they went after this guy.  He was trying to make things go down.  If they went after the manipulators trying to make things go up they'd have to press charges against the Fed, Citadel and most major central banks around this world.  Which would be both difficult and unpopular.

Tue, 04/21/2015 - 16:22 | 6015808 you enjoy myself
you enjoy myself's picture

that's why i LOL'd when i read that the charges included spoofing.  i ask in all seriousness - is there a single HFT that doesn't spoof?  it's pretty much a core tenet of their business models.  other than front running, what else does an HFT do besides spoof and layer?  literally every strategy employed by HFT's is technically illegal.

Tue, 04/21/2015 - 13:24 | 6015060 SillySalesmanQu...
SillySalesmanQuestion's picture

They must have found this "smoking gun" in Bart Chilton's old desk when the CFTC was doing spring cleaning.

Tue, 04/21/2015 - 13:25 | 6015063 turnoffthewater
turnoffthewater's picture

That only took 5 years...getting those warm fuzzy feeling like justice was served but wonder how long it will take to catch the guys that started this whole mess?

Tue, 04/21/2015 - 13:25 | 6015065 TheFourthStooge-ing
TheFourthStooge-ing's picture

US citizens at work. They have been willing and successful at finding scapesgoats to endure the poor consequences of their actions. There are many scapesgoats to explain their incapacitance to deal with reality without mediation of propaganda and fantasy.

Tue, 04/21/2015 - 14:13 | 6015270 LFMayor
LFMayor's picture

I am distressed to find that a lack of suitable stimuli has led to your flaccid state of USCitizisisrms Responses.   Alas, TheFourthStooge-ing wept, for there were no more AnAnonymouses to verbally lambast and slow roast for our general pleasure. 
And so, as Alexander before you, you have succumbed to the waters of the Indus, or Huang-po river, in your case.

Tue, 04/21/2015 - 14:30 | 6015343 TheFourthStooge-ing
TheFourthStooge-ing's picture

Them old river pigs,
they ain't what they used to be,
ain't what they used to be,
ain't what they used to be...

Tue, 04/21/2015 - 16:03 | 6015710 LFMayor
LFMayor's picture

I am all roadside blobbing up with emotions :)

Tue, 04/21/2015 - 16:25 | 6015825 TheFourthStooge-ing
TheFourthStooge-ing's picture

That can somehow be a very mattering property of the physical world concerning space and unicity of position.

Tue, 04/21/2015 - 13:26 | 6015066 R19
R19's picture

Definitely him. Case closed. Nothing to see here. Please move along.

Also, who's responsible for all of these recent flash crashes in spot FX? HAHA

Tue, 04/21/2015 - 13:26 | 6015067 Joebloinvestor
Joebloinvestor's picture

I thought HFT relied on the physical distance the computer was from the server.

Guess time and distance really doesn't matter when they want to blame someone.

Tue, 04/21/2015 - 13:27 | 6015071 Racer
Racer's picture

properly functioning

 

Haha, hahaaaa, hahaha haaahaaa oh please, my sides hurt

Tue, 04/21/2015 - 13:27 | 6015073 Bunga Bunga
Bunga Bunga's picture

Next Peter Schiff will be arrested for causing the housing crash.

Tue, 04/21/2015 - 13:28 | 6015075 Ness.
Ness.'s picture

Just to prove the market is now unrigged the PPT will finish the day with a rip your face off rally just to prove their point.  See, all good.  Come back muppets!!

Tue, 04/21/2015 - 13:29 | 6015081 astoriajoe
astoriajoe's picture

5 years.

That's the time to beat for when they have to sift through the smouldering remains of the financial system.

Tue, 04/21/2015 - 13:30 | 6015087 NoWayJose
NoWayJose's picture

One guy - on one day only? Right!

Tue, 04/21/2015 - 13:44 | 6015140 SillySalesmanQu...
SillySalesmanQuestion's picture

Actually, it was "Three HFT's & A Truck"...three times a day, every day.

Tue, 04/21/2015 - 13:39 | 6015107 undercover brother
undercover brother's picture

Here's the pathetic part: You will hear the story of this guy and the cftc investigation on every single news station non-stop for the next 48 to 72 hours. Not a single word will be mentioned about the fed, virtu, citidel or any other HFT shop even though every single one of them is the unindicted co-conspirator. Blame deflection 101, US gov't style.

Tue, 04/21/2015 - 13:54 | 6015199 R19
R19's picture

I am a full believer in the lone trader theory.

Tue, 04/21/2015 - 14:55 | 6015446 Grinder74
Grinder74's picture

Is a "lone trader" related to a "lone wolf", or a Lone Ranger?

Tue, 04/21/2015 - 16:33 | 6015843 Major Major Major
Major Major Major's picture

Lone Gunmen

Tue, 04/21/2015 - 13:37 | 6015113 ekm1
ekm1's picture

CONCLUSION

 

HFT will be blamed for the upcoming crash in few days or weeks. All pre-planned.

This gentleman is the initial sacrificial lamb. Big bulls coming to be slaughtered on the altar for sacrifice soon

Tue, 04/21/2015 - 13:39 | 6015117 R19
R19's picture

BTW, there is an awesome video out there of real bulls getting their revenge on people bucking them like crazy. I think it's footage from Spain -  worth the watch.

 

BULLS REVENGE
Tue, 04/21/2015 - 13:37 | 6015114 R19
R19's picture

That's it. I'm turning myself in. I am fully responsible for SP500 2100. I AM THE BULL MARKET.

Tue, 04/21/2015 - 13:39 | 6015120 Squid Viscous
Tue, 04/21/2015 - 13:41 | 6015125 NoWayJose
NoWayJose's picture

He could just threaten to spill the beans on the whole corrupt market manipulation that goes on across the board - and if he did threaten that he will get off with just a wrist slap -- assuming he avoids tall buildings and nail guns!

Tue, 04/21/2015 - 15:08 | 6015496 NotApplicable
NotApplicable's picture

You must've missed the part about the color of his skin. If you're not in the club, you at least better have sense enough not to threaten it.

I'm sure they could find a spare nail-gun or two wherever he's jailed.

Tue, 04/21/2015 - 13:53 | 6015128 Dr. Engali
Dr. Engali's picture

Hilarious. I was just talking about the flash crash with a client last week in our review. He said he felt better because they knew the cause of the flash crash. I gave him a sideways glance and said "the reason we had the flash crash is not for the reason they are telling us", and then I went into HFTing. He looked at me skeptically and we moved on.  They can blame this guy all they want, but he has no more to do with the flash crash than Moochelle has to do with being a woman.

Tue, 04/21/2015 - 16:15 | 6015770 InflammatoryResponse
InflammatoryResponse's picture

have them read the FLASH BOYS book :)

 

Tue, 04/21/2015 - 13:42 | 6015132 rejected
rejected's picture

Who's gonna be his character witness? Jamie Dimon? LOL.......

Tue, 04/21/2015 - 13:46 | 6015158 Fun Facts
Fun Facts's picture

Let us know when they arrest every member of the FED, ECB, IMF, and BIS.

Tue, 04/21/2015 - 13:46 | 6015161 Grinder74
Grinder74's picture

"According to the Complaint, Defendants’ manipulative activities contributed to an extreme E-mini S&P order book imbalance that contributed to market conditions that led to the Flash Crash."

 

At other times, Defendants apparently plugged in a lamp, which used some electricity, which drew from a power plant three states away, which in turn killed a species of insect in a nuclear plant's reservoir.

Tue, 04/21/2015 - 14:08 | 6015253 Mr. Bones
Mr. Bones's picture

I like to call this the Wickard v. Fillburn Interstate Commerce method.

 

The wheat used on a farm might have made a local transaction not happen and therefore somewhere along the line an interstate transaction might not have happened, therefore one farm is interstate trade and able to be federally regulated for manipulating prices.

Tue, 04/21/2015 - 13:53 | 6015166 Atlantis Consigliore
Atlantis Consigliore's picture

https://youtu.be/ClnSMCdw6E8   little brown SCAPEGOAT  HI F**zCy Tradah;

is Dat Da Ju Jitzu Alpha code from Israel per the SMALL COP  3 dat caused it all. hahahahahahaha  .!!!

Wheres dere budget?  "DID I DO DAT? "  hahahahahaha...da farce MF ing (no hedge fund here, move along)  complete.

Tue, 04/21/2015 - 13:48 | 6015167 Typing Typer
Typing Typer's picture

How convenient, an Indian fall guy is to blame for it all.

Tue, 04/21/2015 - 14:10 | 6015261 jubber
jubber's picture

You mean another Indian Fall guy

Tue, 04/21/2015 - 14:13 | 6015272 Typing Typer
Typing Typer's picture

Right, just like Rajat Gupta.

Tue, 04/21/2015 - 14:16 | 6015287 LFMayor
LFMayor's picture

..because it is. Probabably the Unknown bollywood stunt man
that made Eastwood and M Night Shamalaans such a starrrs

 

...with apologies to Lee Majors.

Tue, 04/21/2015 - 14:57 | 6015451 Grinder74
Grinder74's picture

Now who's gonna make all that great Indian porn??? (for the SEC)

Tue, 04/21/2015 - 13:48 | 6015168 Grinder74
Grinder74's picture

"or denying CFTC staff access to their books and records"

 

So the Defendant's lawyer cannot attempt to quash overly broad subpoenas?  Nice civil rights violation there.

Tue, 04/21/2015 - 13:50 | 6015183 falak pema
falak pema's picture

You mean we wake up in the Casino 5 years later? Some regulation !

After the thief has made his killing. And is climbing the grapevine of respectability. 

This is getting as good as those thieves who robbed the Brinks in Boston or the great train robbery ! Good goofie movies! 

Tue, 04/21/2015 - 13:52 | 6015190 wissen dass scheiBe
wissen dass scheiBe's picture

...the water is warm,

But its sending me shivers!

Mgmt

Tue, 04/21/2015 - 13:59 | 6015214 lasvegaspersona
lasvegaspersona's picture

Sounds like SOP for all the HFT dudes (and the occasional dudettes)....wonder why he drew special attention? Maybe forgot to tip !HILLARY.

Tue, 04/21/2015 - 13:59 | 6015217 WillyGroper
WillyGroper's picture

oswald/mcveigh of finance.

Tue, 04/21/2015 - 14:05 | 6015241 Keltner Channel Surf
Keltner Channel Surf's picture

Any chance other HFTs turn off their crap this afternoon and let the QQQs actually fall, instead of continue the horizontal-at-all-costs instructions?   Nah ...

Tue, 04/21/2015 - 14:15 | 6015282 Weaponized Innocense
Weaponized Innocense's picture

I heard them pump that shit at markets opening this am how the Nasdaq could hold us up..... like that's a fact. But when the dollar unexpectedly flashed crashed even the Russell side of the TZA took note and started rising despite the Nasdaq and the UVXY from days get go ignored the Nasdaq ...

I haven't looks since this last afternoon turn down.

But so nice they've got the market fixed so well one person can so easily manipulate them...lol.... u know for the fall guy routine explaination excuse distraction

Tue, 04/21/2015 - 14:20 | 6015302 Weaponized Innocense
Weaponized Innocense's picture

FAZ is still kicking

Tue, 04/21/2015 - 14:57 | 6015453 Keltner Channel Surf
Keltner Channel Surf's picture

As Steely Dan once sang:  "never gonna do it without the FAZ on .."

Tue, 04/21/2015 - 14:07 | 6015248 LFMayor
LFMayor's picture

So is he that fucking guy in the gold shirt photo around here?

Tue, 04/21/2015 - 14:31 | 6015354 R19
R19's picture

Do tell. What and where are we speaking of? HAHA

Tue, 04/21/2015 - 16:07 | 6015735 LFMayor
LFMayor's picture

Stick around little brother... the Tylers love that freaking picture, it will turn up again soon, just like the deer in headlights.   Now let me regale you with a story of the good old days, when damn near all the avatars here were topless chicks and bouncing tits. 

And Pladizow was King.  But if you ask William Banzai nicely, he'll send you a Xmas card still.

Tue, 04/21/2015 - 14:11 | 6015264 Racer
Racer's picture

And all those other bankster manipulators in libor et., etc., that all got off with a teeny fine, they were doing nothing????

Tue, 04/21/2015 - 14:14 | 6015277 Atomizer
Atomizer's picture

I was so exited to announce the aniversary. There goes the glass ceiling gay movement parade for political conformance. Getting algorithm buttfucked is planning ahead for welfare blame game. 

Tue, 04/21/2015 - 14:18 | 6015300 LFMayor
LFMayor's picture

you carrying a little bitter there, brother?  Not sayin, or noticing, just asking. :)

 

Tue, 04/21/2015 - 14:16 | 6015284 venturen
venturen's picture

Wonder if he went 5 years without a losing day?

Tue, 04/21/2015 - 14:16 | 6015285 Glasshopper
Glasshopper's picture

So hang on

If I place an order some way away from the market and the market moves to fill my order I'm the one who is manipulating the market? Not the entity moving the market?

Stop hunting comes into mind here

Tue, 04/21/2015 - 14:17 | 6015291 vegas
vegas's picture

So when do charges get filed against the FED's Plunge Protection Team [PPT]? Oh wait ... they manipulate prices on the upside so they are doing "God's work" and are thus immune; meanwhile Chief Scumbag J. Corzine steals 2 Billion from 35,000 customer accounts, says "I dunno" a couple of thousand times and is now free to run his latest new hedge fund toy? What a fucking joke.

 

www.traderzoo.mobi

Tue, 04/21/2015 - 14:18 | 6015299 permarig
permarig's picture

So they're about to blame the reckless market manipulation that occured in the past 5 year on 'lone wolf' day traders? Is this the plan?

Tue, 04/21/2015 - 14:20 | 6015304 29.5 hours
29.5 hours's picture

 

 

Thank heavens, it appears no American was at fault in the Flash Crash...

 

 

Tue, 04/21/2015 - 14:21 | 6015309 R19
R19's picture

In general, blame it on the Indian guy.

Tue, 04/21/2015 - 14:22 | 6015311 The Econ Ideal
The Econ Ideal's picture

"One thing is certain though: when the entire rigged, fraudulent, manipulated market crashes and burns one final time, it will all be the HFTs' fault (as we have been saying since 2013), and not the central banks and their $22 trillion (more than the GDP of the US and Japan) in assets."

 

Not certain - Many of us out here still think the Fed cartel is the leading source of financial instability and market manipulation. 

Tue, 04/21/2015 - 14:36 | 6015373 Catullus
Catullus's picture

So yelling out an offer is manipulating markets now?

If you're "fooled" into selling by a nano-second shout and pull back of an order... You are not a person. Youre a computer. And you don't know any better. And the use of these things is not part of you faithfully executing client orders.

Just make a rule that all orders have to be held open for a second.

Tue, 04/21/2015 - 14:36 | 6015375 JDFX
JDFX's picture

The Flipper is dead. Long live the Flipper ! 

Tue, 04/21/2015 - 14:43 | 6015397 2muchtax
2muchtax's picture

Someone forgot to send in their Obama donation.

Tue, 04/21/2015 - 14:50 | 6015422 gmak
gmak's picture

I can't believe that it wasn't Waddell & Reed,

Tue, 04/21/2015 - 14:50 | 6015423 Grinder74
Grinder74's picture

Why was he stupid enough to live somewhere with extradition to the U.S.?

Tue, 04/21/2015 - 14:53 | 6015434 Grinder74
Grinder74's picture

'And who can't wait for an algo perp walk."

 

Will it look like this?  https://www.youtube.com/watch?v=a-FbktgqCqY

Tue, 04/21/2015 - 15:04 | 6015474 homiegot
homiegot's picture

Played at just the right time.

Tue, 04/21/2015 - 15:23 | 6015553 Shitgum Suicide
Shitgum Suicide's picture

They could've named this case the Fat Finger Two. Except it would be two giant middles fingers pointed at you and I with the caption: justice has been served.

Muthafuckas

Tue, 04/21/2015 - 15:27 | 6015568 Bill of Rights
Bill of Rights's picture

Baine Capital approves this message.

Tue, 04/21/2015 - 15:49 | 6015654 Unholy Dalliance
Unholy Dalliance's picture

So, Navinder Singh Sarao was arrested in Hounslow which is about one to two miles (depending on where the event happened) from where I sit at present. Does anyone know when he was arrested because all hell was going on at lunchtime  - police cars with sirens blasting away one after the other for something like 30 mins. There was also a helicopter hovering around but not over Hounslow (it was further south). All traffic in the local area was fouled up for over an hour.

Was all this in order to arrest one man? If it was, then as ZHers are often saying: 'There is some serious shit going down!' maybe a major bank or two because this all was classic MISDIRECTION. If you Google this story they were all there within minutes: the BBC, the UK nationals and the business papers. No doubt all prepared in advance.

And the BIG question is: what is about to collapse?

Tue, 04/21/2015 - 16:02 | 6015706 DirkDiggler11
DirkDiggler11's picture

And Corzine continues to walk free, and may be starting up his criminal enterprise yet again. Just hang that fucker already !

Tue, 04/21/2015 - 16:09 | 6015738 22winmag
22winmag's picture

He is untouchable as long as he remains both an Obama and a Clinton supporter. I'm sure Rubio will even come on the scene look looking to shake down some lower level offenders.

Tue, 04/21/2015 - 16:06 | 6015730 22winmag
22winmag's picture

I wonder how much Clinton or Rubio will charge him for a pardon down the road.

Tue, 04/21/2015 - 16:15 | 6015769 Omega_Man
Omega_Man's picture

40 million?? what's this guy's number!! 

Tue, 04/21/2015 - 16:22 | 6015772 g'kar
g&#039;kar's picture

Meanwhile, back in the District of Criminals, the Congress and the Dicktator continue to front run the stocks that their legislation affects. But that's ok, business as usual.

Tue, 04/21/2015 - 16:17 | 6015779 R19
R19's picture

Don't leave us hanging... 

 

Tue, 04/21/2015 - 14:07 | 6015248LFMayor

LFMayor Vote up!

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So is he that fucking guy in the gold shirt photo around here?

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