FSA clamps down on international 'spoofing'

Discussion in 'Wall St. News' started by Dogfish, Sep 2, 2011.

  1. Dogfish


    <B>FSA clamps down on international 'spoofing'</B>
    By Nikhil Kumar
    Friday, 2 September 2011

    A number of firms have had assets frozen as part of the Financial Services Authority's drive to clamp down on market manipulation.

    The regulator said it believed that the fund manager Da Vinci Invest Ltd, which is registered in the UK but based in Switzerland, and a related Singapore-based firm Da Vinci Invest PTE Ltd, along with Seychelles-registered Mineworld Ltd and three individuals – Szabolcs Banya, Tamas Pornye and Gyorgi Brad – had committed market abuse by using a technique to mislead the market about the supply and demand of shares.

    The individuals reside in Switzerland and/or Hungary. The conduct took placed between August 2010 and July this year, according to the FSA, which obtained an injunction on Wednesday.

    The manipulation was done using a technique known as "layering" or "spoofing", which saw the placing of large orders for shares which the accused had no real intention of allowing to trade. But the orders triggered share price movements.

    "The traders would then take advantage of the price changes by repeatedly buying shares (when the share price had been manipulated downwards) and selling them (when the share price had been manipulated upwards)," the FSA said, adding that its investigation and court case will continue. "At the same time, they would delete the initial orders which had manipulated the share price."


    More HFT rubbish by looks of their website...

    With Da Vinci Invest you will benefit from our winning combination of the highly-skilled investment expertise and our unique, proprietary, research and trading technology, coupled with speed, flexibility, and a rigorously-disciplined investment approach.

    <B>Da Vinci Event Driven Investment Strategy</b>
    Ultra low latency setup via co-located direct exchange access, cutting edge strategies code and news feed.
    Aims to be the first party to trade at the most favorable prices as soon as there is a discrepancy between the consensus expectation and the actual news data.
    Adjusts volume and profit targets in proportion to the magnitude of the deviation from the consensus expectation and the range of published estimates.
    Stop loss always tighter than the ideal profit targets; therefore the setup is to capture breakouts on surprise news, doesn’t send orders if the actual numbers are too close to the consensus view.
  2. joneog


    Anyone with a last name for a first name, and a first name for a last name, is up to no good.
  3. yeah, it doesn't make sense to engage in medium term strategies when you can make awful amount of cash using such simple techniques.

    in the financial markets no one seem to be interested in legal ways of making profits. too damn difficult and risky.
  4. Bob111


    i've been talking about this "technique" for years, here,on ET..no one believe me..make me think that 90%+ of ET members are absolutely clueless about stocks trading and either have close to zero actual experience or trade futures couple times a day or not trading at all.

    you don't have to be genius to see the impact of HFT various techniques on the US stock market. just look at the charts of low\medium volume stocks and compare today's charts with charts like 5-8 years ago.
  5. Pekelo


    Those 3 guys mentioned are all Hungarians, and their names just like the Japanese, the last name is the first name...

  6. joneog


    ah, my american ignorance on display

    still kind of funny his name is brad
  8. i don't understand what is bad about this... so many people have programs set to front run orders when big bids or offers come in... so someone makes an order to show a fake bid or offer (which can still be filled since it is on the market) then all of the front runners get triggered into action and the original person takes the other side of their front running and then cancels their big bid or offer causing those front runners to quickly take a small loss creating a small winner for the other.

    who is more wrong? the person who is front running orders? or the person who tricks them into front running... if front running is fair then tricking people into front running should also be fair.