Story is originally from www.zerohedge.com and in google translation here : http://translate.google.com/transla....dn.no/forsiden/borsMarked/article1956354.ece Any comment from Timer Hill ?
Hmmmm....That's like a bit over 50 grand usd; I do not see how entering trades in a fashion that causes their algo to move the price is manipulation. That's like all we have in these markets... Oh, and six years is too harsh.
The bids and offers were not "real". As opposed to imaginary? Even if the bids and offers were away from the market, a large sweep order could fill the submitted prices and there'd be no way to get out of the trade after you were filled. I have a long history with exchanges being much closer to regulators. The exchanges portray your prices as somehow immoral. The SEC had a leaked report on the AMEX options market, where the SEC caught the AMEX falsifying documents to cover up how the AMEX screwed the public on option fills. It didn't matter, even with the regulators own words, because the SEC exists to protect entrenched broker-dealers, so that SEC personnel can later get jobs in the industry. I've read about bots whose purpose is to fake out the other bot, and/or get a feel for the size of the opposing orders. Everything is fair game.
Here is a little better explanation from zerohedge http://www.zerohedge.com/article/tw...e-doing-what-hft-algos-do-us-every-single-day
seems like a bunch of bullshit to me. first off, how can you prove that one party is guilty of this and not another? it's pretty much accepted that this is done all the time. It has its risks. You can't really stop it, can you? I have no problem with it, but even if you do: at most, maybe the penalty should be that they aren't allowed to trade on that exchange. The same way casinos would ban card-counters from playing. Going to jail for it sounds like a huge injustice.
Neither the zerohedge summary nor the original story have any content. There's no explanation of what the "flaw" in TimberHill's software was.
The Norwegian "news" report was that the prosecution will take this to trial. I think they will lose, however.