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

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."

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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.


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