Hilarious. That will teach him. The mighty hand of the law prevails yet again. We can all sleep tight.
To be fair, he didn't do anything wrong on the face of it... He just tried to trade big size during an illiquid time in the mkt. It wasn't done to manipulate the closing price or anything of the sort, so it's not clear what they could go after him for.
1) I wish the article had mentioned his position size and the remaining open interest when he did the trades. 2) To have done what he did, with only one minute to go before contract expiration, is the height of stupidity. :eek: 3) He should have been out of the position before, (FND), First Notice Day for delivery, the last business day of November 2008. 4) He may have also violated position limits for the spot month which should have been an additional serious & punishable offense. 5) The reputation of the futures industry in the USA has been diminished greatly the past few years without having some unqualified buffoon from an investment bank do something else that only makes it worse. 6) From what I can surmise, you're a European / Wilmott.com / London-domiciled / quant-jockey dude. You're looking at this "issue" with too much of a detached perspective.
1. He tried to trade 150 lots in total to cover the tail. OI was, obviously, orders of magnitude bigger. 2. No, it's not the height of stupidity. My guess is that he erroneously thought that the mkt could handle 150 lots of TY. But this was Dec 2008, when sh1t was hitting the fan. 3. Erm, says who? Is that some sort of a new rule you've just invented? You realise that, in his capacity, he could easily handle delivery? 4. No, he didn't violate any position limits, not according to CBOT, anyways. Moreover, if the tail he had to do was 150 lots, his entire position was not that large. 5. Erm, not sure about your general point, but I assure you, having met Glenn Hadden a few times, the one thing he isn't is unqualified. He might be a crap risk taker (my personal view), but he knows the mkt. 6. You surmise somewhat incorrectly. I am actually pretty actively involved in the UST mkt, rather than being a detached "quant-jockey dude". The reason I am not too excited about this case is because, unlike yourself, I am not prone to swift pronouncements based on a newspaper article or two (in my experience, traders who do this don't last very long). Moreover, i know this particular mkt, am involved in it now and was involved in it in Dec 2008. Based on the description of the incident in the CBOT notice, it was most likely an honest attempt to execute a small trade that normally wouldn't be a problem, during a very tricky time in the market. There's undoubtedly a possibility that I am wrong and this was an attempt to manipulate the settlement px of the TY contract, but I think it is extremely unlikely.