Flash Crash fades, but 3 threats remain

From USA Today Money –

“Where were you five years ago, today (May6, 2010)? If you had your head in your hands for 36 painful minutes, you were probably investing in the stock market.

It’s been five years since the Flash Crash rocked U.S. markets, sending the Dow Jones industrial average down roughly 1,000 points, or 9%, in just minutes. Despite years of hand-wringing and even a court hearing with a trader accused of being involved, little has been determined about what caused this infamous short-circuiting of the markets.”

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Flash crash case arouses skepticism

From Saudi Gazette –

“The notion that one man trading from his parents' house in a working class London suburb had a material role in the 2010 Wall Street flash crash has aroused increasing skepticism from investors and traders since charges were brought on Tuesday.

The US has asked UK authorities to hand over Navinder Singh Sarao, 36, after his arrest this week on charges that he manipulated markets over several years in a fraudulent scheme that helped cause the stock market rout.

The US Department of Justice alleges that Sarao used souped-up, off-the-shelf software to trick other market participants into thinking massive sell orders were about to hit, causing the so-called E-mini S&P futures prices to drop so he could buy at cheaper levels. In doing so, he made $40 million in profits, US authorities allege.

But traders doubt that Sarao could have had the upper hand in a market dominated by Wall Street firms with powerful computer trading programs and huge technology budgets. The charges against Sarao, operating far from the center of US markets and engaging in activity some believe occurs every day among larger firms, show that regulators may not shy away from publicity, even if their case may be legally solid.”

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Two Futures Traders Banned From CME Following 'Flash Crash' Trader Navinder Sarao's Arrest

From International Business Times –

“Hard on the heels of charges against a trader who authorities say helped spark 2010’s "flash crash," the Chicago Mercantile Exchange disciplined two gold and silver futures traders for allegedly engaging in the same kind of market manipulation.

The CME on Thursday announced a 60-day ban for traders Heet Khara and Nasim Salim for allegedly colluding to use the disruptive strategy known as “layering.” The traders “repeatedly entered orders or layered multiple orders for gold and silver futures contracts without the intent to trade,” the CME said in a pair of notices.”

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