24
APR
2015

Hound of Hounslow

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The papers just love an alliterative headline and the accused market trader is certainly making for good copy in an otherwise dull election news period. The leading authority on High Frequency Trading, Michael Lewis author of Flash Boys, asks some pertinent questions in the Evening Standard last night. Anyone that knows a little of this business would have been surprised that a one man band could have caused such devastation to the markets and Michael, who knows more than virtually anyone else in this area, is no exception.

Some of his questions were, ‘Who was his broker?’, ‘Where did he get the idea that you could game the Goldman Sachs algorithm?’ and ‘What about all the other firms that engage in spoofing?’.  Other appropriate questions would  be how the CME, in 2010, ruled out the role of E-mini futures in triggering the ‘Flash Crash’ yet this is the very instrument the accused ‘Hound’ was trading in. Another would be why it took them so long to make the charges, the authorities were well aware of his activities.
About the Author
Blogs are generated by the staff of Pragmatic Compliance Solutions who have had regulatory experience of over thirty years each. Compliance started with the AFBD back in 1987 and both the compliance experts that run Pragmatic Compliance Solutions were well into their careers by then. They have watched compliance develop from a time when insider dealing was acceptable, to the current state of virtually total control. A whole new industry has evolved in this period of change to safeguard the clients and the financial system. Pragmatic Compliance Solutions has become aware that the regulations are now so complex, it is difficult to find one service provider with all the answers, let along cost effective answers. Hence the company was born.

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