Mon Jul 13th, 2009 at 09:53:05 AM EST
From one in a recent series of Daily Kos diaries by bobswern
DKos Diary Reverberates Throughout Wall St. (w/update) there is this eye-catching quote:
While the Street is percolating with anger and curiosity about "High Frequency Trading" there is also frustration and astonishment that the media, regulators and our duly elected are not addressing what could be the biggest financial abuse story of our times, if not history.
Kind of catches ones attention, don't it?
Not being well versed in things regarding the economy and the stock market, I defer to the resident wizards here at Eurotrib to better elaborate what this means in the discussion section, but I for one am watching to see if anything happens with this one, of if the masters of the universe put this down before it explodes.
See below for a more detailed description:
From the above noted diary, there is this:
...The abbreviated version of the story, in a few sentences: A senior technology strategist and Vice President at Goldman-Sachs, Sergey Aleynikov, copied much of his firm's "secret sauce"--an extensive set of proprietary, automated stock trading software code and algorithms--all related to "program trading." Upon finding out about this, senior officials at Goldman-Sachs informed the FBI of all of this and had Aleynikov arrested at Newark Airport on July 3rd.
The code, as it has been noted by many, including Goldman-Sachs, allows the firm to execute securities/commodities transactions in microseconds, thus providing their company with an extreme edge over their competitors. The tacit fact is, with proper monitoring of market trades, in general and as facilitated by Goldman's own practices, it's entirely conceivable--albeit significantly questionable from a legal standpoint--that the firm would be enabled to "frontrun" its competition at quite a grand scale, too, since it could see trades occurring in real-time, and then execute its own trades automatically at lightning speed, before the previously-observed trades of others were even concluded.
All along, for the past nine-plus months--and in part due to government-related authorizations (by appointing Goldman-Sachs as the only active player in a new effort known as the "Supplemental Liquidity Program") to enable Goldman to assist the Feds in propping up stock/commodities markets during the noted economic upheavals of same during this period--it has also been widely noted that Goldman had all but cornered the market, literally, in terms of the sheer volume of in-house trading the firm was engaged in during the time, supposedly, on its own behalf; to the point where it had been widely observed and documented that well over half of all program trading occuring on Wall Street (we're talking 20%-30% plus of all stock/commodities trades in this country, for all intents and purposes), during many weeks over the past nine months, was being executed by Goldman-Sachs, too.
Go read the whole article, it is quite intriguing (but maybe not so surprizing)...the question is, will anything happen, or will this just quietly be swept under the carpet?