HFT Stock Manipulation In Action - page 6
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Barclays' dark pool shunned by clients after fraud case
Money managers and brokers are shunning Barclays' dark pool after allegations the bank lied to clients about whether they would be dealing with high-frequency traders, according to people with knowledge of the matter.
Deutsche Bank, Royal Bank of Canada, Sanford C. Bernstein & Co. and Investment Technology Group Inc. are among brokerages that disconnected from the Barclays LX venue, said the people, who asked not to be identified because the decisions were private. Voya Financial Inc. also stopped sending orders to the dark pool after New York Atty. Gen. Eric Schneiderman sued the bank.
A dark pool is a private forum for trading securities that is not openly available to the public.
"Given the news of the NY Attorney General investigation, we are instructing you effective immediately, to not route any of our Voya IM orders to Barclays LX dark pool or any Barclays venues," Nanette Buziak, head of trading for Voya Investment Management, told brokers in an e-mail obtained by Bloomberg News.
New York's top law-enforcement official accused Barclays of assuring investors they would be protected from high-frequency traders while it simultaneously aided predatory tactics, according to a copy of the complaint. The bank's stock fell 6.5% Thursday in London trading.
LX suffered malfunctions amid disconnections Thursday morning in New York, according to a person with direct knowledge of the matter.
Barclays is cooperating with regulators and investigating internally, a spokesman, Mark Lane, said. "The integrity of the markets is a top priority of Barclays," he said.
Voya, the insurer and asset manager that was previously majority-owned by ING Groep, told brokers to cut off the dark pool to protect its investors, according to Dana Ripley, a spokesman for the New York-based company. He said Voya would monitor the situation. Bernstein's Jonathan Freedman didn't return messages.
Barclays LX is the second-largest U.S. dark pool, trailing only Credit Suisse Group AG's Crossfinder, according to data from the Financial Industry Regulatory Authority. Along with misrepresenting who traded there, the bank sent too many orders to its own venue, according to the complaint.
Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co., the three largest equity traders among U.S. banks, already didn't send orders to the dark pool, according to people with knowledge of the firms' operations who asked to remain anonymous because the routing arrangements aren't public.
source
I sure hope that HFT days are numbered. What they are doing is no good for forex at all. If it continues like this soon we shall have to trade 100 lots in a 10 pip day range to catch 2-3 pips and to run from swaps before 11pm. If you are not already a millionaire you will not be able to do that. And one income that we could have is going to be shut for us
VIX-Manipulating HFT Algo Is Booted From Dark Pool, Exposed For Whole World To See
VIX was monkey-hammered lower once again today, lifting stocks vertically to Russell 2000 record highs and The Dow within a point of 17,000. The question is who (or what) is doing it. Nanex appears to have found out who...It appears the un-visible hand of VIX manipulation (that we have shown previously) has been forced into the open public markets as Barclays goes dark. Simply put, massive bursts of 1-lot TVIX orders flood and delay the markets enabling HFTs to manipulate the tail that inevitably wags the market (via VXX, SPX options, and leverage) and now that the dark pools are disappearing, we see it all in real-time.
We have previously noted the odd 'dark pool' manipulation we suspected was occurring in VIX derivatives... Through massive VXX selling in dark pools...
Is someone (cough Fed via Citadel) using dark pools to manage their volatility suppression - which implicitly spooks the actual markets in implied vol and thus in a "tail wags the dog" manner, juices the entire US equity market... but we do not find out about it until after hours as the dark pool unleashes its volume at VWAP pricing...
Makes us wonder if this is the fingerprints of the NY Fed's Kevin Henry hard at work managing perceptions via dark pools with as much leverage as possible via the vol markets.
just like he did here the week of The Fed Minutes
read more
SEC targets 10 firms in high frequency trading probe - SEC document
The U.S. Securities and Exchange Commission has been seeking information on 10 registered broker dealers as part of an ongoing investigation into high-frequency trading strategies, according to an internal SEC document reviewed by Reuters.
The regulator told its staff in late March that it was interested in seeing any tips, complaints, or referrals that they receive concerning the brokers and high frequency trading.
The firms listed are Allston Trading LLC; Hudson River Trading LLC; Jump Trading LLC; Latour Trading LLC, which is an affiliate of Tower Trading; Merrill Lynch, Pierce, Fenner & Smith, owned by Bank of America Group; Octeg LLC, which has been merged into a unit of KCG Holdings Inc; Tradebot Systems Inc; Two Sigma Investments LLC; Two Sigma Securities LLC; and Virtu Financial.
They are all some of the largest trading firms in the U.S. Allston and Jump are both based in Chicago. Hudson River, Latour, Merrill, Two Sigma, and Virtu are headquartered in New York. KCG is in Jersey City, New Jersey, and Tradebot is based in Kansas City, Missouri.
Jump, Latour, Bank of America, Hudson River, Tradebot and KCG declined to comment. The other firms did not immediately respond to a request for comment.
Their number and the open-ended quest for information shows that the SEC is casting a wide net as it looks to unearth wrongdoing in the marketplace.
It is not known if the SEC found any violations of securities laws at any of the firms. The SEC declined to comment.
A number of government agencies, including the SEC, New York State Attorney General Eric Schneiderman's office, the Commodity Futures Trading Commission and the Federal Bureau of Investigation have said they had active probes into high-speed and automated trading.
The SEC has been seeking evidence of abuse of order types, as well as traditional forms of abusive trading like "layering" or "spoofing" and other issues relating to high-frequency trading that might be violations of the law, SEC Director of Enforcement Andrew Ceresney told Reuters in May
source
They will not do anything in the end
Some fine that these companies will regain in a couple of days and that will be all. And we shall be left at their mercy again
HFT is here to stay
No central bank will disable HFT, no broker will disable HFT, no government will disable HFT. HFT is here to keep the things as they are : rich to stay rich and poor to stay poor
HFT is here to stay No central bank will disable HFT, no broker will disable HFT, no government will disable HFT. HFT is here to keep the things as they are : rich to stay rich and poor to stay poor
100% agree. HFT is there to keep us thinking that we have a chance
Trading firms raised early concerns about Barclays' dark pool: WSJ
Trading firms and employees raised concerns about high-speed traders at Barclays Plc's "dark pool" months before the United States accused the bank of favoring its high-frequency trading clients, the Wall Street Journal reported, citing people familiar with the firms.
New York Attorney General Eric Schneiderman filed a lawsuit last month, accusing the Barclays dark pool of giving high-frequency traders an unfair advantage, even though the bank had promised investors they would be protected from "predatory" and "toxic" traders.
The lawsuit alleges that Barclays executed nearly all of its customers' stock orders on its LX Liquidity Cross dark pool alternative trading system instead of on exchanges or other venues that might have offered better prices.
Some big trading firms noticed that their orders weren't getting the best treatment on the dark pool and began to grow concerned that the poor results were due to high-frequency trading, the Journal said. (on.wsj.com/1tocIWT)
Dark pools let institutional investors trade large blocks of shares anonymously and only make trading data available afterwards so that investors with large orders are not at a disadvantage.
A number of Barclays employees also privately expressed concerns to top stock-trading executives that the London-based bank was giving high-frequency traders too much access to its dark pool without fully informing clients, the newspaper said.
Barclays is expected to respond to the attorney general's civil complaint this week, the report said, adding that the bank is expected to argue that certain emails and other documents cited in New York's complaint were taken out of context.
Mark Lane, a Barclays' spokesman, declined to comment on the report.
Reuters reported last month that Barclays had hired external lawyers to help it investigate the allegations, including Matthew Martens, formerly the chief litigator at the U.S. Securities and Exchange Commission.
source
In case somebody missed it : it took only a couple of seconds to fall 30 pips down and then immediately go back up those 30 pips. HFT at its best (worst)
How FX Algos Saw The Overnight Chaos
"Crash" is the new normal in FX markets it would appear. As the following charts show, first we had AUD turbulence, then EUR crashed, and now JPY is continuing its cataclysmic carry-trade-driven push for hyperinflation as it pushes to 114 - a stunning 6 handles collapse since the FOMC statement...
First AUD then EUR plunge...
Then JPY keeps sliding against everything...
AS USDJPY continues to collapse - now 6 handles since FOMC
Source: Nanex @NanexLLC