OT: selling at the 'wrong' price is fraud

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robvanhooren

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OT: selling at the 'wrong' price is fraud

posted on Apr 21, 2015 05:33PM

at least according to the FBI.

the scheme went something like this:

Sarao would offer multiple trades for sale below market price;
bid market price would drop to meet perceived supply;
Sarao would cancel the trades automatically when the price got too close to his ask, then
the market price would stabilize again.

in the meantime, he was making money on the futures, because he knew precisely when the price would drop.

ingenious, but it relied on other people mis-valuing the market.

GLAL,

http://www.justice.gov/opa/pr/futures-trader-charged-illegally-manipulating-stock-market-contributing-may-2010-market-flash

http://www.justice.gov/sites/default/files/opa/press-releases/attachments/2015/04/21/sarao_criminal_complaint.pdf

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