There is no manipulation with fake bids or offers and by the way, there is nothing illegal about fake bids and offers if you have REAL money at risk if a bid or offer gets hit, that you may not want to be hit. There is nothing fake about that money or the bids or offers. It is real money for the taking. There is no manipulation here, just a "bad trader" on the Timber Hill side. Heck, for every trade I LOST money on to an automated program, I could claim the automated program manipulated the prices to make sure I lost money. See how this works? These guys honored all the trades, hit displated bids and asks and too bad to Timber Hill and UBS in that other instance.
This is how a trader at a Norwegian online trading forum explained what the two day traders probably did on a repeated basis. (This matches the prosecutor's description as well)
One Trader (Timber Hill) is in the book with a 5k bid at 9.7 and a 5k ask at 10
You buy 5000 “XYZ” at 10 from Timber Hill (TMB)
Then TMB moves to bid to 9.8 and the ask to 10
You buy 100 at 10.10
TMB moves to 9.9 bid and 10.2 ask
You buy 100 at 10:30
TMB Moves to 10.1 bid and 10.4 ask
You buy 100 at 10.40
TMB moves to 10.2 bid and 10.5 ask
You buy 100 at 10.5
TMB moves to 10.3 bid and 10.6 ask
Then you sell 5500 at 10.3 (even if it shows only 5,000, it’s hidden and take the rest too
If you can short the stock, you dump 5k at 10.30 bid and follow the same pattern on the way down
End result: 56650-55150=1,500.
“In our view it is a deliberate manipulation against the computer they’ve been trading against so that the system changed the prices and they were able to earn money,” said Christian Steinberg with the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime in an interview with the Norwegian newspaper Dagens Naeringsliv.
The newpaper report said that Larsen declined to comment and Veiby denied any wrongdoing on the grounds he did “not act with the intent to commit price manipulation in the legal sense.” The alleged scam was uncovered by the Oslo Stock Exchange, which reported it to the Norwegian National Authority and Prosecution of Economic and Environmental Crime. |
