“A futures trader was arrested in Britain for his alleged involvement in the .flash crash. of 2010 in which the Dow Jones industrial average plunged 600 points in five minutes,” The Associated press reports. “After the arrest Tuesday of Navinder Singh Sarao, American authorities — who are seeking Sarao’s extradition — unsealed a federal criminal complaint in Chicago charging him with multiple counts of fraud and manipulation.”
“The complaint says Sarao, 37, used an automated trading program to manipulate the market for E-Mini S&P 500 futures contracts on the Chicago Mercantile Exchange,” AP reports. “Saroa’s manipulation of trades ‘earned him significant profits,’ a statement from the U.S. Department of Justice alleges.”
“The United States is seeking Sarao’s extradition, the Department of Justice statement says,” AP reports. “Sarao is charged with one count of wire fraud, 10 counts of commodities fraud, 10 counts of commodities manipulation and one count of ‘spoofing.’ Spoofing involves bidding with the intent of quickly canceling the bid.”
Read more in the full article here.
MacDailyNews Take: Better late than never. Hopefully this finally sends a message to anyone else who gets the bright idea to attempt to illegally manipulate and defraud the markets.
Related articles:
Apple stock experiences mini ‘flash crash’ – February 10, 2011
SEC bans ‘naked access’; aims to avert future ‘flash crash’ fiascos – November 4, 2010
Feds say single large trader led to May 6 ‘flash crash’ stock market plunge – October 01, 2010
Did Apple stock today suffer its own personal mini flash crash? – September 28, 2010
SEC’s Schapiro: ‘Flash crash’ anxiety may have fueled retail investors exodus from stock market – September 07, 2010
Is another stock market ‘Flash Crash’ inevitable this year and will it be triggered on purpose? – August 30, 2010
Did manipulators use Apple stock to cause the markets’ May 6th ‘Flash Crash?’ – June 08, 2010
SEC looks at market makers in May 6th ‘Flash Crash’ stock market plunge – May 20, 2010
Apple shares briefly bungee jump below $200 – May 06, 2010
It is unfortunate that there are legal ways to manipulate the market that should be stopped.
“Flash crash” could also describe my web browser when its running an Adobe plug-in.
How is this related to Apple? Yes, the stock plunged along with the entire market. But why here on MDN?
Oh… Now I see
“What I’m unable to show is why Apple dropped 23%. The SEC should immediately study the trades of Apple on May 6. If a large trader(s) precipitated the market crash on May 6, Apple was the vehicle.”
Wait … you don’t want a special seasonal 23% discount on Apple stock?
and is jim cramer a-quaking in his boots now?
or has the statute of limitations expired on his self admitted manipulation of the markets ?
I bet this happens all the time but to lesser degrees. Someone is out there every day trying to manipulate the market. Apple stock is so volatile they should market the i-yoyo.
All of this points out the need to “go long” on Apple with a steady nerve.
“Pork Bellies! I think something is going to happen today with pork bellies.”
-Louis Winthorpe III
(Trading Places – 1983)
There is a very long history of socioeconomic benefit related to issuing stock in a company to raise necessary funds and to provide a means to provide liquidity to owners of the company.
No one has been able to provide me with any convincing argument that there is any socioeconomic benefit to the short term electronic trading that seems to be so easily manipulated by the daily release of “information” from multiple sources who are not held accountable for their “reporting”. This “Flash Crash” is only one of the more extreme example of how serious socioeconomic damage is being done every day by ever more complex short term trading structures. Explain to me why they should remain legal.