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The FBI has joined securities regulators to tackle the potential threat of market manipulation posed by sophisticated computer trading strategies that have taken markets beyond the scope of traditional policing.
FBI agents have joined forces with a new unit within the Securities and Exchange Commission that examines hedge funds and other firms that are using algorithm trading strategies.
The SEC’s Quantitative Analytics Unit is looking at abuses that might arise from the emergence of high-frequency trading firms and the use of dark pool (off exchange) trading. Traders using these methods can manipulate the market by flooding it with quotes, known as quote stuffing, or placing millions of orders that are quickly cancelled, to drive others to trade in ways that benefit their position, a practice known as layering. Continue reading "FBI joins SEC in computer trading probe"→
October 27th, 2010 – Where does the blame for the financial meltdown lie? The public is looking for a scapegoat for the financial slowdown and regulators have found one for them… High Frequency Traders. This blame game is very similar to what occurred during the Great Depression of 1929 when short sellers in the stock market were singled out and vilified as the “cause” of the economic woes in the United States. Today, it’s hedge funds, dark pools, and high frequency traders that are being targeted as the prime cause of the financial trouble in the United States and around the world. Continue reading "High Frequency Trading: What’s The Real Story? An Answer to 60 Minutes"→