Congratulations To Prominent Anti-HFT Crusader Eric Hunsader For Winning $750,000 Whistleblower Award

Tyler Durden's picture

It has been nearly six years since Zero Hedge proudly began collaborating with Nanex and Eric Hunsader (recall first from June 2010: "How HFT Quote Stuffing Caused The Market Crash Of May 6, And Threatens To Destroy The Entire Market At Any Moment") who has been one of the most vocal critics of everything this website has also stood against: rigged, manipulated markets, and corrupt and captured regulators and government officials.

Over those years we have posted hundreds of examples using Nanex data which have demonstrated without any doubt instances of one-time or wholesale manipulation, involving virtually every asset class, from stocks, to bonds, to oil, to nat gas, and of course gold, having exposed numerous spoofers and manipulators in the process.

Nanex's and Hunsader's persistence in exposing market manipulation won it numerous "tin foil hat" jeers from participants (many of whom criminals themselves) of the very same rigged industry which he had set out to expose.

Which is why we are delighted to report that after many years, Nanex has finally been vindicated, and is the first whistleblower eligible under the Dodd-Drank Wall Street Reform and Consumer Protection Act of 2010 meant "to reward an independent third party for analysis of a potential securities law violation."

His reward: $750,000.

The actual SEC announcement actually took place some six weeks ago, in an SEC press release in which it announced that the "SEC Awards Whistleblower More Than $700,000 for Detailed Analysis" however at the time the SEC did not disclose the individual receiving the award:

The Securities and Exchange Commission today announced a whistleblower award of more than $700,000 to a company outsider who conducted a detailed analysis that led to a successful SEC enforcement action.

 

“The voluntary submission of high-quality analysis by industry experts can be every bit as valuable as first-hand knowledge of wrongdoing by company insiders,” said Andrew Ceresney, Director of the SEC’s Enforcement Division.  “We will continue to leverage all forms of information and analysis we receive from whistleblowers to help better detect and prosecute federal securities law violations.”

 

Sean X. McKessy, Chief of the SEC’s Office of the Whistleblower, added, “This award demonstrates the Commission’s commitment to awarding those who voluntarily provide independent analysis as well as independent knowledge of securities law violations to the agency.  We welcome analytical information from those with in-depth market knowledge and experience that may provide the springboard for an investigation.”

The full reward, according to Francine McKenna amounts to $750,000 and it is being awarded to Hunsader for his exposure of violations that led to a $5 million fine for the New York Stock Exchange in 2012. As McKenna reports, "Hunsader showed MarketWatch a letter from the SEC that confirmed the approval of his award and told MarketWatch he was the recipient of a pending award for the tip that led to the NYSE fine. By law, the SEC does not publicly identify the whistleblower’s name or the company that was subject to the order. The notice to Hunsader on Monday also said the time period for all other potential claimants to appeal the SEC decision on the same issue had expired."

Hunsader noted he gave the information to the SEC and published it on his site before a whistleblower award rule was even in effect.

 

“The office wasn’t even set up but the Dodd-Frank law passed the day before. I gave it to them on July 22 and the whistleblower office opened up a year later,” he said.

 

He also said he told the NYSE directly, but they told him he was not a member.

 

A spokeswoman from the New York Stock Exchange declined to comment on whether Hunsader brought the issue to them first.

As MarketWatch adds, Hunsader has some advice to would-be whistleblowers, especially other outsiders trying to tell regulators about an issue based on their own original analysis.

It doesn’t matter if an algorithm is ripping off the market, for example, you have to prove intent. You better be absolutely sure you can prove intent. The SEC had a good piece of evidence to go confidently to the NYSE ,” said Hunsader. “You could not refute it. It only took three charts. I told them, ‘There’s nothing more you need from me.’”

Hunsader also praised Markopolos, who unsuccessfully tried to report the activities of Bernie Madoff to the SEC.

When asked what he’ll do with the windfall, he laughed out loud. “I have four daughters! It’s going towards college tuition, of course.”

As for his side of the story, Hunsader has a blog post recapping his original work which led to the award, titled simply "Vindicated."

* * *

Our sincere congratulations to Hunsader for this well-deserved recognition of his ongoing fight against the Goliaths of a market so rigged that only a wholesale crash and reset can ever restore it to some semblance of normalcy and fairness.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
ZH Snob's picture

I guess it beats getting paid in lead.

buzzsaw99's picture

no mention of the culprit whatsoever. rest assured it wasn't goldman sachs.

VinceFostersGhost's picture

 

 

His reward: $750,000.

 

Sweeeeeeet!

pillory-hillary's picture

yes..really.  congratulation and THANK you.

WayBehind's picture

$5m fine is just a pocket change for those Banksters ... just a small price of doing a (lucrative) business.

 

... move on, nothing to see here and business as usual on Wall St.

NoDebt's picture

SEC:  "Here's your $750K.  Now please stop doing this.  You're fucking everything up for our constituency."

hedgeless_horseman's picture

 

 

Congratulations!

Now, if we could only get some external regulation of the banks.

The Board of Governors of the Federal Reserve System has supervisory and regulatory authority over a wide range of financial institutions, including state-chartered banks that are members of the Federal Reserve System (state member banks), bank holding companies, thrift holding companies and foreign banking organizations that have a branch, agency, a commercial lending company subsidiary or a bank subsidiary in the United States. While the Board establishes supervisory policies, the Board delegates day-to-day supervision to the Reserve Banks.

 

https://www.newyorkfed.org/financial-institution-supervision/financial-i...

Yes, the Federal Reserve Bank supervises and regulates the very same banks that own it.

hedgeless_horseman's picture

 

 

He also said he told the NYSE directly, but they told him he was not a member.

Because the NYSE already got this.

Be data driven. NYSE Governance Services provides unmatched governance and compliance analytics and education solutions for leading organizations and their boards. We help individuals and organizations to elevate accountability, enhance performance, and manage risk through dynamic learning solutions...all driven by preeminent thought leadership and quantitative analysis.

https://www.nyse.com/governance

And it's a big and conflicted club, and you ain't in it.

conflict of interest

 

n. a situation in which a person has a duty to more than one person or organization, but cannot do justice to the actual or potentially adverse interests of both parties. This includes when an individual's personal interests or concerns are inconsistent with the best for a customer, or when a public official's personal interests are contrary to his/her loyalty to public business. An attorney, an accountant, a business adviser or realtor cannot represent two parties in a dispute and must avoid even the appearance of conflict. He/she may not join with a client in business without making full disclosure of his/her potential conflicts, he/she must avoid commingling funds with the client, and never, never take a position adverse to the customer.

Yes, the NYSE pretends to regulate its owners, and its owners pretend to be regulated.

This whislte-blower is lucky he gets $750k and his freedom.

If it was Uncle Sam breaking the law, then he could be forced to hide out in Russia, like Snowden.

Government needs you to pay taxes's picture

And in taking 6 years to get to this point, the SEC has vastly enriched the bankster thieves who rigged up the HFT system.  WINNING!

Diet Coke and Floozies's picture

Awesome job Tyler / Eric. Now you can get someone to look into marketmaking and B booking and how no one is prosecuted for outright theft in those activities... https://www.youtube.com/watch?v=8s_hNSZV3SE for details...

Herd Redirection Committee's picture

hedgeless = Hunsader?

Or Tyler #x = Hunsader?

JRobby's picture

and is the first whistleblower paid under the Dodd-Drank Wall Street Reform and Consumer Protection Act of 2010

 

ENOUGH SAID

ml8ml8's picture

Is that reward taxable or tax-free?

NoDebt's picture

I'm going to give you three guesses and your first two don't count.

Save_America1st's picture

this doesn't mean that they're ever going to actually do anything to stop this from happening every single fucking day though. 

The_Small_Lebowski's picture

he might want to have a look at todays gold action

TheReplacement's picture

$750K = College Tuition

$750K = Hookers and Blow

Which is the better investment?

oncemore's picture

Yes, it is a pocket fine.

But it could draw more, than 5M latter:

1. Someone could sue them for 100M

2. They are a recognized crooks with all consequence not only for them, but for the establishment..

exi1ed0ne's picture

15% of the fine is bullshit.  It should be 100% of the fine seeing as being a whistle blower is putting their fortune and lives in some cases on the line.

Fuck the whole rigged game anyway.  Anybody that has funds in this corrupt market at this point is just as guilty as the abusers.  You can't have a con without a mark.

Beowulf55's picture

Is that before or after taxes?

Boris Badenov's picture

It was the NYSE itself. The fine should have been way higher, in my opinion.

SirRobin's picture

Congratulations is inorder to this gentleman!  Seriously he did what many other could not.  On the flip side, to bad he was paid from the proceeds from the sale of the Barney Frank Daddy Bush underage porn collection.  Wonder if they could setup a fund for the Whitehouse tour or Bohemian Grove boys.  Hunter Thompson Thanks You!

BullyBearish's picture

Nobody's asking the IMPORTANT question...whose $750K?

TheReplacement's picture

Mine.  Is okay.  My kid doesn't need college anyway.

mandalou's picture

Congrats but the SEC will now need the 750k as a bribe for IEX speed bump.

medium giraffe's picture

Congrats Eric! Keep up the outstanding work!

silverer's picture

It's all good. I'm sure the after-tax net for this reward was reasonable. Well, on second thought...

ParkAveFlasher's picture

He can now afford that coveted parking space in the outskirts of Vancouver.  Seriously though, how cool is this guy?

LawsofPhysics's picture

Mind the nailguns...

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Mar 1, 2016 9:10 AM

$750k for college tuition...I guess they will pull straws to see which one is able to go.

Lady Jessica's picture

So is this 750K from JPM or GS?  Or is it like Secret Santa and the joy is merely in the giving?

VinceFostersGhost's picture

 

 

I think it came out of Obama's stash.....aka the Saudis.

https://www.youtube.com/watch?v=_Ojd13kZlCA

Lady Jessica's picture

I hear that's like getting milk out of a billygoat since the oil crash.  Lucky Mr Nanex!

Baa baa's picture

Printed the day of delivery.

r0mulus's picture

sequential bill numbers?

just kidding, they obviously paid it with the proceed from the fines. or, like you said, they spent all of it and printed more. and hey, qe gave it to the NYSE in the first place...

Monetas's picture
Monetas (not verified) Mar 1, 2016 9:15 AM

How about a whistle blower award .... on Hitlery, Obama and Holder ?

Baby Eating Dingo22's picture

750k

Is that in a 30 year annuity?

Muppet's picture

Had it been from Illinois, he would have gotten a IOU.

JustObserving's picture

It's a big win for Zero Hedge too.  Congratulations.

waterwitch's picture

Just think how many awards ZH could rack up.

spanish inquisition's picture

"....... We have received thousands of submissions of a credible nature. Unfortunately, it took this long to prosecute because everyone else was well connected to current political, financial and military structures."

buzzsaw99's picture

we at the sec, being but one tentacle of the vampire squid, can only do so much.