A Case Of Quant Trading Sabotage About To Destroy Goldman Sachs?

A Case Of Quant Trading Sabotage About To Destroy Goldman Sachs?

zerohedge.blogspot.com

Matt Goldstein over at Reuters may have just broken a story that could spell doom for if not the entire Goldman Sachs program trading group, then at least those who deal with "low latency (microseconds) event-driven market data processing, strategy, and order submissions." Visions of swirling, gray storm clouds over Goldman's SLP and hi-fi traders begin to form

(visit the link for the full news article)


Related News Links:
market-ticker.org

Related AboveTopSecret.com Discussion Threads:
Taibbi: NYSE ends transparency to protect Goldman Sachs

Well, something appears to be happening involving the FBI the source has a PDF of a court filing.

Apparently someone stole some proprietary trading software. This may also be related to whats being discussed in another thread here on ATS.

Right now all I can find with comments on this are Zerohedge and Denninger. From the Zerohedge site it looks like rueters is about to release something.


zerohedge.blogspot.com
(visit the link for the full news article)

he allegations, if true, are big news because the codes the accused man, Sergey Aleynikov, tried to steal is the secret code to unlocking Goldman’s automated stocks and commodities trading businesses. Federal authorities allege the computer codes and related-trading files that Aleynikov uploaded to a German-based website help this major “financial institution” generate millions of dollars in profits each year.

From Rueters

[edit on 5-7-2009 by jefwane]

Ugh I really don't like this program trading. I am kind of glad that GS got their code stolen from them. Part of me wants it to be duplicated, but then some other people with a lot of money can try and manipulate the markets I wonder what the government has to say about this? I have read somewhere that some members of Congress are talking about regulating these "dark pools" where the program trading takes place. This will just allow them to create another agency if we see the markets go down due to this problem.

Sounds like something is about to go "boom!" financial wise. This is a big development.

The undisputed number one has disappeared off the NYSE list, and from other news it sounds like this has been known for a few weeks. I wonder who Goldman is going to take down with them?

Denninger is right, the next couple of weeks should be an interesting watch...from a distance.

Any guesses on the Chicago firm that hired him at $1.2 million salary?

Why the FBI? Because he uploaded it to a foreign site? I mean, not every criminal offense is handled by the FBI right? Can someone explain this to a non-american.



edit for typos

[edit on 5-7-2009 by helpmefindtheway]

Originally posted by Hastobemoretolife
Sounds like something is about to go "boom!" financial wise. This is a big development.

The undisputed number one has disappeared off the NYSE list, and from other news it sounds like this has been known for a few weeks. I wonder who Goldman is going to take down with them?

I agree. I wonder if this tanks the markets or how this will affect the markets? Programmable trading at the peak last week made up 49% of all NYSE volume and GS makes up almost 60% of that volume. That is A LOT of volume for one firm to make up, especially with the anemic volume on the exchanges of late. I wonder if the gov. will force other firms to pick up the volume? Too many variables right now.

I say anything that can bring GS down must inherently be a good thing.

Let it burn and I'll dance naked around the ashes in a wild frenzy as victory dance. Even if it brings others down with it, at least the what remains will be a more level playing field.

The antipathy I have toward Goldman Sachs is only rivaled by that which I also hold for Cheney and Kissinger.

I just pray Matt Taibbi is still in good health when it's all over. That dude needs bodyguards.

reply to post by RetinoidReceptor

I wonder if the gov. will force other firms to pick up the volume? Too many variables right now.

That there are. There is no telling what can happen. All I know is the shell game is going to come to an end at some point in the future. They can't keep it going forever.

Originally posted by helpmefindtheway
Why the FBI? Because he uploaded it to a foreign site? I mean, not every criminal offense is handled by the FBI right? Can someone explain this to a non-american.

Many securities laws are Federal laws, see here

If state securities laws are violated also, there can be state charges filed in addition to the federal charges.

Well this is an interesting development. Thanks for the OP.

reply to post by Arbitrageur


Ok, I see. I wasn't thinking of it as a securities violation because it didn't involve any direct trading violations, but I can see that if it involves the theft of software involved in securities, it can be covered.

Appreciate the reply, should be interesting.

duplicate post, too much red bull

[edit on 5-7-2009 by helpmefindtheway]

I wonder if this is the next Enron that Reinhard is talking about.

I know squat when it comes to the market and maybe I am really off base, but seems plausible to me.

Enterprise Corruption

edit to add link

[edit on 7/5/2009 by tribewilder]

I never trusted GS, because of the Mad Money guy on CNBC always sucking up to them.

Keep your eye on JPM!!!

second line_________________________________________________

What I think is most worrying is that GS basically was approx. responsible for 25% of all NYSE volume according to the reports above...60% of the automated trades that were 49% of NYSE volume recently. I knew nobody was buying into this rally except the banks and government, the markets were just moving way too strangely for real people and funds to be buying and selling. The problem is if their sh*t computers have nobody to sell to, then what? I just thought it would be hilarious if someone accidentally spilled coffee on one of the computers and it crashed the markets and they said "oops"

bummer. i guess the gov is going to have to find another house to do their monkey business though.

www.abovetopsecret.com...

We may never know.

Didn't they extend trading time for an extra half hour sometime last week? They said it was because of some ..how did they put it..irregularities in trading?
Wonder if this has something to do with this new scandal?

Zindo

The fact is these program trades MUST be outlawed or they will crash the markets one of these days. Someone in Congress needs to do something BEFORE a crisis occurs and not after it.

Originally posted by ZindoDoone
Didn't they extend trading time for an extra half hour sometime last week? They said it was because of some ..how did they put it..irregularities in trading?
Wonder if this has something to do with this new scandal?

Zindo

They extended trading for 15 minutes on Thursday, and yes this definitely could have had something to do with it.