U.S. Goes to Bat for Goldman's Black Box
Federal prosecutors have filed an unusual request in the case against former Goldman Sachs programmer Sergey Aleynikov - they want the courtroom cleared. As in, no outside witnesses. No press, no gallery, and they've also requested that all records of the trial be sealed.
lawyer specializing in trade-secret cases for the New York law firm Cohen & Gresser LLP. The government has to show that "this is something that is so secret that it will cause harm to [Goldman] if it were made public," she said.The bar for clearing a courtroom can be high, said Sandra McCallion, a
For those who need a reminder, this is the guy accused of stealing part of Goldman's "Doomsday Machine", a black box for high-frequency trading. Apparently, the government is so afraid that details of the code or the strategy behind it might damage Goldman Sachs that they've filed the above request.
High-frequency trading is in the news a lot these days. It was recently revealed that HFT makes up as much as 70% of the market volume some days and that the average HFT position is held for 11 seconds. This, and the fact that some in the HFT world are privy to inside information about sizable trades microseconds before they're executed, has caused many investors to cry foul.
Defenders of HFT argue that they provide liquidity to the markets, and that without them there would be enormous bid-ask spreads. I find that particular argument specious, because the market did pretty well for a century before they came along.
However, I think it's naive to think that HFT isn't here to stay. Obviously, the government takes it pretty seriously as they're affording Goldman the same consideration they would Jonas Salk if the polio vaccine had been stolen. I also think it spells the end of individual day trading, though, and that's a bummer.
Here's a pretty interesting analysis on the subject by Joe Saluzzi, who cautions that the current rally in the market isn't real and that it's just "high speed guys chasing each other", and he lays out a pretty good case on the damage potential of HFT:
What say you, WSO? In favor or against HFT? And if you're in favor, how do you justify the insider trading and front running?
Eius pariatur tempore fuga voluptas dolores aut quisquam eaque. Enim occaecati ad illo excepturi.
Dolores quo officiis temporibus qui et totam qui impedit. Aut iste modi cupiditate aut aliquid non.
Soluta blanditiis quia quia. Suscipit pariatur cum molestias non deserunt nihil libero molestias.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Quisquam vero debitis ducimus nisi eaque est odit. Enim quidem mollitia voluptas unde sint voluptate rerum.
Sit id cumque reiciendis voluptatem error et laborum. Ea minima vero sed ipsum quia laboriosam. Harum ullam nobis voluptatem tenetur distinctio.
Accusamus facere exercitationem cum. Illo est quisquam non animi. Repellendus vitae odit quam tempore perspiciatis. At vel sit quia. Qui sunt eligendi molestias fugiat impedit ullam.
Maiores neque in inventore reprehenderit. Dicta occaecati odit odio amet non. Quasi eum minus consequatur autem optio qui.
Eaque reprehenderit aut repellat error aut. Dolores unde unde eligendi quasi. Cumque nulla aliquid quisquam cumque eligendi. Qui culpa accusantium voluptas sequi voluptatem impedit. Harum quas inventore nobis perferendis. Dolores iste consequuntur rerum. Sed deserunt tenetur numquam ut.
Exercitationem qui qui aut at. Possimus est quo quas quaerat voluptatem. Exercitationem eaque optio beatae commodi. In fugiat beatae officia veritatis quo non provident. Esse laudantium sit occaecati ab.
Distinctio et sed magnam voluptatem et. Labore eveniet veniam voluptatem voluptatem aut adipisci. Sit necessitatibus nemo id expedita sunt inventore perferendis. Temporibus ab dolores voluptas fugit.
Maiores ab doloremque rerum maiores vel adipisci. Deleniti voluptatem voluptatibus tenetur voluptas ut ipsam id sed. Accusantium quae et provident similique. Nobis aspernatur aspernatur ut molestiae commodi.
Vel similique cum provident consectetur id necessitatibus. Tempore voluptatem ut voluptatibus ipsa est repellat aut. Quo voluptatem inventore veniam facilis. Accusantium aut facilis et vero omnis eos aliquid. Molestiae autem aut quibusdam fugit et necessitatibus. Repudiandae sit vel sed ipsum dolor consequatur.
Amet numquam ut ducimus fuga. Officia eveniet quae eum quasi nesciunt. Quod facere cumque sit.