Norwegian traders convicted for outsmarting US stock broker algorithm

The Norwegian traders, Svend Egil Larsen and Peder Veiby, were handed suspended prison sentences and fines for market manipulation after outsmarting the trading system of Timber Hill, which is a unit of US-based Interactive Brokers.

The two men managed to work out how the computerised system would react to certain trading patterns. This allowed them to influence the price of low-volume stocks for their own gain.

via Norwegian traders convicted for outsmarting US stock broker algorithm – ComputerworldUK.com.

I agree – it’s like jailing someone for using Word to write a letter – if you know that’s the functionality, that’s what you’re going to exploit it for. Then Timber Hill shouldn’t have used something so predictable as a computer algorithm and certainly not without oversight. Just because there’s money in it, it’s a crime?!

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