The Trader as Scapegoat

[DanTex]

A BRITISH trader, Navinder Singh Sarao, is facing extradition to the United States. Federal prosecutors accuse him of having significantly contributed to the “flash crash” of May 6, 2010, in which major American stock markets plunged dramatically in a matter of minutes. Prosecutors also say that he manipulated prices on the Chicago Mercantile Exchange for years by “spoofing,” or placing orders that he intended to cancel before they were filled.

In fact, this is a common activity in equities markets today. The prosecution of Mr. Sarao is arbitrary, and his contribution to the flash crash was negligible.

http://www.nytimes.com/2015/04/28/opinion/the-trader-as-scapegoat.html

This article is spot-on. High-frequency traders spoof all the time, but instead of going after the big guns, they single out one small-time unsophisticated player and pretend he caused the whole problem.

[PoliticAverse]

1. Apparently Mr Sarao isn't "too big to jail". n/t