How High-Frequency Trading Firms Can Rig the Game

“Let’s make sure we don’t kill the golden goose,” a manager warned cohorts at New York high-frequency trading firm Athena Capital Research, which had developed a rapid-fire, complex algorithm code-named “Gravy” to fraudulently manipulate the closing prices of tens of thousands of big-name U.S. stocks, such as eBay (EBAY) and Northern Trust Corp. (NTRS). The internal email followed an automated alert received by the multimillion-dollar fund from the Nasdaq stock market informing it that “suspicious orders or quotes that are potentially intended to manipulate the opening or closing price will be reported immediately.” More on Newsweek here.