Sun, Aug 31, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

UK financial watchdog starts targeting high frequency traders

Thursday, August 01, 2013

Benedicte Gravrand, Opalesque Geneva:

The UK’s Financial Conduct Authority (FCA) last week fined US-based high frequency trader Michael Coscia $903,176 (£597,993) for deliberate manipulation of commodities markets. This is the first time the FCA has taken enforcement action against a high frequency trader.

According to the FCA’s announcement, Coscia used an algorithmic programme of his own design to instigate an abusive trading strategy known as "layering" during a period of six weeks in September and October 2011. He placed thousands of false orders for Brent Crude, Gas Oil and Western Texas Intermediate (WTI) futures on the ICE Futures Europe exchange (ICE) in the UK. As this generated price movements, he made $279,920 in profits by trading at the expense of other investors, especially other high frequency traders or traders using algorithmic and/or automated systems.

Coscia is not a member of ICE, nor is he an FCA Approved Person. He traded through from the US through a Direct Market Access (DMA) provider.

He agreed to settle early and received a 30% discount on the fine, which otherwise would have been more than $1.15 million (£764K).

In the US, the Commodities and Futures Trading Commission (CFTC) and the Chicago Mercantile Exchange (CME) also fined Coscia for similar manipulations on US markets, on the same day. ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Study shows what resonates with investors: 'Unwavering', 'passionate' beats 'committed', 'dedicated' and more surprises[more]

    Komfie Manalo, Opalesque Asia: A new study by Pershing Square, a unit of BNY Mellon company, showed that an effective value proposition strengthens audience connections and fosters growth, yet many advisors have had little objective guidance in formulating such statements until now. In the

  2. Comment – Why you should avoid the hottest hedge fund hands, Swedroe attacks Hussman over risk management, relative value strategy[more]

    Why you should avoid the hottest hedge fund hands FromCNBC/Yahoo.com: Investors who don't have money with Pershing Square Capital Management are likely salivating at the hedge fund's industry-leading 26 percent return from January through July. But investing with Bill Ackman and other to

  3. AIMA makes 'the case for hedge funds'[more]

    Bailey McCann, Opalesque New York: The Alternative Investment Management Association (AIMA), the global hedge fund industry body,

  4. Managed futures' global diversification is important in next phase of economic recovery[more]

    Komfie Manalo, Opalesque Asia: The global diversification provided by managed futures may prove to be extremely valuable as the markets enter the next phase of the economic recovery, said Campbell & Company, a pioneer in absolute return invest

  5. Ex-UBS prop trader's hedge fund Manikay Partners eyes UK launch[more]

    From eFinancialnews.com: Manikay Partners, a $1.7 billion US multi-strategy hedge fund set up in 2008 by a proprietary trader from UBS with backing from Goldman Sachs, is planning to open in the UK. New York-based Manikay's move into Europe comes after Financial News revealed on Monday that Aurelius