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Inside traders who submit large blocks via darkpool reduce their chances of getting caught. If enough insiders collude and decide to anonymously, but simultaneo
by shawnee_ 14y ago
Inside traders who submit large blocks via darkpool reduce their chances of getting caught. If enough insiders collude and decide to anonymously, but simultaneously act on a certain company via darkpool trading, the chances of getting caught are further reduced. (Mapping patterns among public info is presumably much easier than mapping patterns among cloaked private info).
What is interesting and kind of baffling is that this fine was waged at all, in light (cough) of the supposed goal of the SEC to "strengthen regulation of dark pools" proposed back in 2009:
http://www.sec.gov/news/press/2009/2009-223-fs.htm http://www.sec.gov/news/press/2009/2009-223-fs.htm
I would be willing to bet that dark pool trading, which tripled in volume between 2002 - 2009 has probably 10Xed between 2002 and 2012, and might even be one of the underlying causes of the much hyped meltdown of the markets right around that time.
- yummyfajitas 14y agoMy question is how are the chances of getting caught reduced? With an exchange, the world sees "BUY 100@$23.12." Some time later they see "TRADE 100@$23.12." With a darkpool, the public only sees the trade, not the quote. How does seeing the quote make it easier to detect insider trading? Note that on a dark pool or exchange, the SEC gets to see all the data. I would be willing to bet that dark pool trading...and might even be one of the underlying causes of the much hyped meltdown of the [mortgage] markets right around that time. I'd take your bet. The meltdown of the markets occurred primarily as a result of OTC bond-like products, which are sold by salesmen picking up the telephone.