Thursday, April 24, 2014

Sudden Death Syndrome Update ( Update May 1 , 2014 ...... original post April 24 , 2014 ) for Bankers / Financial Industry Professionals collects 15 victim as a french female banker commits suicide by leaping 14 floors to her death - after questioning her Supervisors ..... ( See 4/20/14 missive for additional color and back story ) ....

http://www.zerohedge.com/news/2014-04-24/52-year-old-french-banker-jumps-her-death-paris-after-questioning-her-superiors
Update May 1 , 2014 ....


http://www.dailymail.co.uk/news/article-2617028/Bank-manager-27-washes-dead-Hoboken-harbor-month-went-missing-training-half-marathon.html


Bank manager, 27, washes up dead in Hoboken harbor a month after he went missing while training for a half-marathon 

The body of a man that was pulled from the Hudson River Monday has been identified as that of a 27-year-old jogger from New Jersey who went missing March 30. 

The New Jersey Regional Medical Examiner’s Office identified the remains Tuesday night as Andrew Jarzyk, of Hoboken, thanks to the forensic analysts of the victim’s teeth and personal identifiers like tattoos. 

The exact cause and manner of death have yet to be determined, but officials say Jarzyk's body showed no signs of trauma to suggest foul play.

Scroll down for video
Andrew Jarzyk, 27, was found floating in the Hudson River
Jarzyk worked as a manager for the PNC bank
Missing man: The body of Andrew Jarzyk, 27 (left and right), was found in the Hudson River nearly a month after he went missing while out for a jog in Hoboken, New Jersey 
Tragic end: A passerby spotted the missing man's body floating in the river near the historic Erie Lockawanna Train Terminal in Hoboken
Tragic end: A passerby spotted the missing man's body floating in the river near the historic Erie Lockawanna Train Terminal in Hoboken

Jarzyk was discovered floating in the water near the historic Erie Lockawanna Train Terminal just after 5.30pm Monday. 

The New York City Police Department’s Habror Unit responded to the scene and pulled the body out of the river.

Jarzyk's family issued a statement on Facebook last night confirming the tragic discovery and saying that their loved one’s death remains a mystery. 

'At this time we do not have answers into why Andrew’s life ended at such a young age. Please be accepting to the fact we may never have these answers,' his brother Steve Jarzyk wrote. 

Andrew Jarzyk, a manager at The PNC Financial Services Group in Woodland Park, was last seen alive at around 2am on March 30 outside his Hoboken apartment dressed in his running gear. 

Jarzyk was training for a half marathon last month
He spent the night of March 29 in a club with friends
Athletic: Relatives say Jarzyk often went out jogging because he was training for a half marathon 
Final moments: A surveillance camera caught Jarzyk (seen in circle) running along the waterfront at around 2am on March 30
Final moments: A surveillance camera caught Jarzyk (seen in circle) running along the waterfront at around 2am on March 30
Desperate search: Police and the man's family have spent the past month looking for him and appealing to the public for information

Desperate search: Police and the man's family have spent the past month looking for him and appealing to the public for information

Surveillance cameras captured him jogging along the waterfront, but it remains unknown how he ended up in the river. 
Jarzyk’s relatives said he went out for runs often since he was training for a half-marathon in Long Branch at the time. 

Earlier that night, Jarzyk was spending time with his friends at the West Five Supper Club on Madison Street, The Jersey Journal reported. The 27-year-old, who only recently got a promotion at work, appeared in good spirits, according to people who were at the club at the time.

At around 1am, Jarzyk left the supper club but told his group that he would return shortly. He never made it back. 

His family described Andrew Jarzyk as a kind and selfless man

His family described Andrew Jarzyk as a kind and selfless man

NYPD made several attempts to find Jarzyk, but searches of the Hudson yielded no clues. The missing man's family have spent the past month distributing fliers and putting up billboards asking for public's help in finding him.   

Then on Monday evening, a passerby came upon a body at the ferry slips south of Pier A, which is where Jarzyk was caught on camera the night of his disappearance, according to Hudson Reporter.
On Wednesday, Hoboken Mayor Dawn Zimmer issued a statement offering her condolences to Jarzyk’s family and friends.




and.....





52 Year-Old French Banker Jumps To Her Death In Paris (After Questioning Her Superiors)

Tyler Durden's picture





There have been 13 senior financial services executives deaths around the world this year, but the most notable thing about the sad suicide of the 14th, a 52-year-old banker at France's Bred-Banque-Populaire, is she is the first female. As Le Parisien reports, Lydia (no surname given) jumped from the bank's Paris headquarter's 14th floor shortly before 10am. FranceTV added that sources said "she questioned her superiors before jumping out the window," but the bank denies it noting that she had been in therapy for several years.

An employee of the Bred-Banque Populaire has committed suicide, Tuesday, April 22 in the morning at the headquarters of the bank. On her arrival at headquarters, quai de la Rapee, in the 12th arrondissement of Paris...

The incident occurred shortly before 10 am, 200 meters from the Ministry of Finance.

...

According to our sources, she questioned his superiors before jumping out the window, that formally denies the direction of the Bank.

"There is absolutely no evidence for designating his relationships with his hierarchy as responsible or letter or message " insists the direction of the communication FranceTV info.

It also speaks of a "very painful moment for the company" .

...

In an email to all employees consulted by FranceTV info,the management of the bank confirms the "death by suicide" and said "severely affected." It shows have established a psychological unit.

...

"For the moment, nothing puts the company in question, says the majority union SUNI-Bred/UNSA. The employee got along very well with her new team, her superior is very nice.

"According to a close," Lydia lived alone, in a difficult environment.

The human resources department states that this inhabitant of Ivry was in therapy for several years. Each describes a "secretive" but "very well known and popular" woman, but "never spoke of it."
This is the 14th financial services exective death in recent months...
1 - William Broeksmit, 58-year-old former senior executive at Deutsche Bank AG, was found dead in his home after an apparent suicide in South Kensington in central London, on January 26th.
2 - Karl Slym, 51 year old Tata Motors managing director Karl Slym, was found dead on the fourth floor of the Shangri-La hotel in Bangkok on January 27th.
3 - Gabriel Magee, a 39-year-old JP Morgan employee, died after falling from the roof of the JP Morgan European headquarters in London on January 27th.
4 - Mike Dueker, 50-year-old chief economist of a US investment bank was found dead close to the Tacoma Narrows Bridge in Washington State.
5 - Richard Talley, the 57 year old founder of American Title Services in Centennial, Colorado, was found dead earlier this month after apparently shooting himself with a nail gun.
6 - Tim Dickenson, a U.K.-based communications director at Swiss Re AG, also died last month, however the circumstances surrounding his death are still unknown.
7 - Ryan Henry Crane, a 37 year old executive at JP Morgan died in an alleged suicide just a few weeks ago.  No details have been released about his death aside from this small obituary announcement at the Stamford Daily Voice.
8 - Li Junjie, 33-year-old banker in Hong Kong jumped from the JP Morgan HQ in Hong Kong this week.
9 - James Stuart Jr, Former National Bank of Commerce CEO, found dead in Scottsdale, Ariz., the morning of Feb. 19. A family spokesman did not say whatcaused the death
10 - Edmund (Eddie) Reilly, 47, a trader at Midtown’s Vertical Group, commited suicide by jumping in front of LIRR train
11 - Kenneth Bellando, 28, a trader at Levy Capital, formerly investment banking analyst at JPMorgan, jumped to his death from his 6th floor East Side apartment.
12 - Jan Peter Schmittmann, 57, the former CEO of Dutch bank ABN Amro found dead at home near Amsterdam with wife and daughter.
13 - Li Jianhua, 49, the director of China's Banking Regulatory Commission died of a sudden heart attack
14 - Lydia _____, 52 - jumped to her suicide from the 14th floor of Bred-Banque Populaire in Paris





And from before .........







Sunday, April 20, 2014


Banker deaths updates April 20 , 2014 ( Running total of suicides , mystery deaths and murders now at 14 ) - From unexplained suicides and mystery deaths , no we have stepped up to murders of Bankers !

http://www.zerohedge.com/news/2014-04-20/bnp-banker-his-wife-and-nephew-murdered-belgium

( for the Banksters , the trend is not your friend... and the recent trend has been murders ....)


BNP Banker, His Wife And Nephew Murdered In Belgium

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In the beginning it was banker suicides. Then about two weeks ago, suicides were replaced by outright murders after the execution-style killing of the CEO of a bank in otherwise sleepy (and tax evasive) Lichtenstein by a disgruntled client. Then on Friday news hit of another execution-type murder in just as sleepy, if not so tax evasive, Belgium, where in the city of Vise, a 37-year-old Director at BNP Paribas Fortis was murdered alongside his wife and a 9 year old nephew in a premeditated and orchestrated drive-by shooting.

According to Marcel Neven, Mayor of Vise, nothing can yet explain what caused the violent shooting that rocked the neighborhood sports hall of his town this Friday, April 18, late at night. A man of 37 years, Benedict Philippens, bank manager Ans-Saint-Nicolas, was shot. A little 9 year old boy, living in Dolhain, was also killed. A lady, the wife of the man and the boy aunt and godmother, Carol Haid, 37 also died of his injuries on Saturday, in the morning. She was hit by three bullets in the back, said a judicial source.
According to information from the survey and some witnesses, a car waiting outside their house Berneau street near the sports hall Visé. When the victims' car is back in the driveway, shots were fired from the car that waited patiently. The author of the shots is actively sought.

So far neither the shooter nor any motive for the execution have not been found: "Some suggest the presence of a single gunman with an automatic pistol, others are surprised that a bullet hole was noted in one of the windows of the sports hall. "That would mean that the author was already in the driveway of the house and waited for the victims side of the house," says a source close to the case."
Like in the Lichtenstein murder, there is a possibility the murder was the result of a previous argument with a customer:
This Sunday, the investigation is ongoing but it seems that the track of reckoning is preferred. In 7Dimanche newspaper, a friend of Benedict recalls that he had a big argument with a customer six months ago.  He had even threatened the director publicly. He then had to put on the door. "There are six months, he told me he had a big argument with a foreign client."
Needless to say the locals of the quiet town are stunned by the news:
According to the neighbors, "the couple lived for 5 or 6 years" in his little house. They had been married a little over a year. The neighborhood shocked again that it is a normal family. "Usually, shootings in the region, it is often stories of drug with the Dutch, because it is not far from the border."

The mayor did not say more about the possible causes of this unfortunate news item. He noted, however, that the occupation of the victim, banker, "perhaps could" be related to drama. Marcel Neven adds that this is the first time in his back as mayor he faced such violence in a crime. "The police arrived on the scene Friday night was very impressed to see the body there in the driveway."
So just like in the Lichtenstein murder, was it truly some atrocious act by bankers that caused their clients to take justice into their own hands, or is it becoming the norm that when dealing with members of the banker class, the population - disenchanted with a legal system that is largely in the pocket of the financial system - is increasingly resorting to not only vigilante justice, but the taking of banker lives with no regard for innocent bystanders?
If indeed so, this could mark a dramatic, and lethal, escalation in the way bankers are treated by the broader public, not only in places where banker revulsion is palpable but in quiet, sleepy backwaters like a small Belgium town.




http://www.zerohedge.com/news/2014-04-07/ceo-liechtenstein-bank-frick-murdered



CEO Of Liechtenstein Bank Frick Murdered In Broad Daylight


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Over the weekend the world was gripped by the drama surrounding the mysterious murder-homicide of the former CEO of Dutch bank ABN Amro and members of his family, and whether there is more foul play than meets the eye. However, that is nothing compared to what just happened in the tiny, and all too quiet Principality of Lichtenstein, where moments ago the CEO of local financial institution Bank Frick & Co. AG, Juergen Frick, was shot dead in the underground garage of the bank located in the city of Balzers.

Based on preliminary reports, the murder is the result of a disgruntled fund manager, Juergen Germann, who had previously been embroiled in a "bitter dispute" with the government and the bank. Bloomberg has more:
A 48-year-old man was shot dead in the underground garage of a financial institution in Balzers at 7:30 a.m. local time, the principality’s police said on its website. The suspect, Juergen Hermann, fled the scene in a Smart car with Liechtenstein number plates, according to police. Neither the victim nor the institution were identified in the statement.

The deceased was Juergen Frick, CEO of Bank Frick & Co. AG, Switzerland’s Radio 1 said in an e-mailed statement, citing employees of the bank. Calls to Bank Frick were answered by a voice-mail message saying the company is closed because of “a death.” It gave no further details.

Hermann is a fund manager who has been embroiled in a dispute with the Liechtenstein government and Bank Frick for many years, Switzerland’s Radio 1 said.

The Liechtenstein government and the country’s Financial Market Authority “illegally destroyed my investment company Hermann Finance and its funds, depriving me of my livelihood,” according to a website registered under the name Juergen Hermann of Hermann Finance AG.

He has filed lawsuits seeking recovery of 200 million Swiss francs ($225 million) from the government and 33 million francs from Bank Frick, according to the website. The lender “illegally enriched itself,” among other alleged crimes, it said.

A representative of Hermann’s lawyer declined to comment when reached by telephone. A call to Hermann Finance’s office was answered by an employee of a law firm who said his company isn’t related to Hermann Finance.

The narrative against the "publicly hostile" alleged shooter has already been flushed out.

Hermann has been “publicly hostile” to the country’s Financial Market Authority and some of its employees, forcing it to take security measures in consultation with the police, FMA spokesman Beat Krieger said in an e-mail today.

The escape vehicle was later found in the village of Ruggell, 25 kilometers (16 miles) north of Balzers, police said.

“The area is being searched by police with dogs and helicopters,” the 120-member police force said. Zurich police are helping to document the crime scene, spokesman Mario Cortesi said.
Here is the update form the local police station:


On Monday morning, it came in Balzers a homicide, the suspect is currently volatile.

Against 07.30 clock in an underground garage of a financial institution is a homicide in which a 48-year-old man was shot occurred. When volatile suspects are Jürgen Hermann from the Moors. He is armed and dangerous, according to police reports, the investigation of the National Police is in full swing.

Notes on a possible whereabouts of the suspects are requested immediately to the police landing +423 / 236 71 11. Upon encountering the suspect, it is important to exercise extreme caution.
Below is the profile of the murdered CEO,still on the bank's website:
As CEO Jürgen Frick is closely involved in all business activities of the bank with a special focus lying on client advisory, financing and financial product development. As well he supervises all real estate development projects of the Bank.

Jürgen is also Chairman of the Board at Crystal Fund Management AG, a subsidiary of Bank Frick & Co.

As for the bank itself:
Bank Frick is active in modern wealth management and provides a range of advisory services. As well it specializes in fund development and fund administration.

Our Bank entertains close ties to an efficient network of fiduciaries, insurers, tax experts, investment funds and law firms around the world.

We are completely independent. Our advice and our services cater exclusively to the individual needs and requirements of our clients.

Combinvest Establishment serves as holding for all bank shares. Family Frick is the majority stake holder.

After a successful career in international banking and fiduciary services, Kuno Frick senior founded in December 1998 Bank Frick & Co. AG. Due to his wide experience and excellent connections, Bank Frick proved an immediate success.

Since then, the bank’s assets under management have risen steadily. New business segments are continuously being added to the bank’s service portfolio, while existing ones are constantly being refined.

In autumn 2011, Bank Frick’s international presence was significantly enhanced with the opening of Bank Frick UK Branch in Mayfair, London.
Up until now it was mostly banker suicides. With the first open bank CEO murder, one wonders if there will be a change in the pattern. 






http://www.zerohedge.com/news/2014-04-05/abn-amro-ex-ceo-found-dead





ABN Amro Ex-CEO Found Dead

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mere two weeks since former JPMorgan banker, Kenneth Bellando jumped to his death, Bloomberg reports that the former CEO of Dutch Bank ABN Amro (and his wife and daughter) were found dead at their home after a possible "family tragedy." This expands the dismal list of senior financial services executive deaths to 12 in the last few months. The 57-year-old Jan Peter Schmittmann, was reportedly discovered by his other daughter when she arrived home that morning. Police declined to comment on the cirumstances of his (and his wife and daughter's) death. This is not the first C-level ABN Amro banker to be found dead. In 2009, former CFO Huibert Boumeester was discovered with (assumed self-inflicted) shotgun wounds.




Former ABN Amro Group NV Netherlands Chief Executive Officer Jan Peter Schmittmann, his wife and a daughter were found dead at their home today after a possible “family tragedy,” Dutch police said.

The bodies of a father and mother and their daughter were found at the property” in the town of Laren, 32 kilometers (20 miles) southeast of Amsterdam, Dutch police said in a statement on their website today. Leonie Bosselaar, a police spokeswoman, said in a telephone call with Bloomberg News that the deceased were Schmittmann and two family members.
The police received a call around 10:30 a.m. local time from a family acquaintance who said something may be wrong at the property, according to the statement. Bosselaar declined to comment further on what may have happened.

The Dutch newspaper AD reported, without citing anyone, that the family was discovered by Schmittmann’s second daughter when she arrived home this morning. She was scheduled to travel to India with her parents, where she had an internship lined up, the newspaper said.

Schmittmann, 57, joined ABN Amro in 1983 as assistant relationship manager and was named head of the lender’s Dutch unit in 2003. He stepped down from the Amsterdam-based bank in December 2008, after the company was nationalized earlier that year.
Sadly, given recent trends, the default assumption is that it is suicide until proven otherwise which is just as disturbing from a sociological perspective. (on the bright side, at least as far as we know, we was not involved in HFT) but further to that, this is not the first ABN Amro seniot executve to be found dead. In 2009, Schmittmann's former CFO was found dead from shitgum wounds:


The former chief financial officer of Dutch bank ABN Amro has been found dead with shotgun wounds near his home in Surrey, the BBC has reported.


Huibert Gerard Boumeester was found dead yesterday, Sunday, with shotgun wounds, one week after being reported missing and “vulnerable”. Reports claim he was found with two shotguns which he had brought from his home, though Thames Valley Police say his death is currently being treated as "unexplained".

Boumeester, 49, left his role as CFO encompassing responsibility for group-wide finance, risk management, investor relations, communications and strategic decision support in March 2008 citing "personal reasons" six months after ABN Amro was bought by Fortis, Royal Bank of Scotland and Santander. The Dutch government now owns Fortis Bank and has taken direct ownership of its stake in ABN Amro. The British government owns most of RBS.
There are suggestions that Boumeester took his own life...
****







This brings the sad list of senior financial services exectives who have died in the last few months to 12:

1 - William Broeksmit, 58-year-old former senior executive at Deutsche Bank AG, was found dead in his home after an apparent suicide in South Kensington in central London, on January 26th.
2 - Karl Slym, 51 year old Tata Motors managing director Karl Slym, was found dead on the fourth floor of the Shangri-La hotel in Bangkok on January 27th.
3 - Gabriel Magee, a 39-year-old JP Morgan employee, died after falling from the roof of the JP Morgan European headquarters in London on January 27th.
4 - Mike Dueker, 50-year-old chief economist of a US investment bank was found dead close to the Tacoma Narrows Bridge in Washington State.
5 - Richard Talley, the 57 year old founder of American Title Services in Centennial, Colorado, was found dead earlier this month after apparently shooting himself with a nail gun.
6 - Tim Dickenson, a U.K.-based communications director at Swiss Re AG, also died last month, however the circumstances surrounding his death are still unknown.
7 - Ryan Henry Crane, a 37 year old executive at JP Morgan died in an alleged suicide just a few weeks ago.  No details have been released about his death aside from this small obituary announcement at the Stamford Daily Voice.
8 - Li Junjie, 33-year-old banker in Hong Kong jumped from the JP Morgan HQ in Hong Kong this week.
9 - James Stuart Jr, Former National Bank of Commerce CEO, found dead in Scottsdale, Ariz., the morning of Feb. 19. A family spokesman did not say whatcaused the death
10 - Edmund (Eddie) Reilly, 47, a trader at Midtown’s Vertical Group, commited suicide by jumping in front of LIRR train
11 - Kenneth Bellando, 28, a trader at Levy Capital, formerly investment banking analyst at JPMorgan, jumped to his death from his 6th floor East Side apartment.
12 - Jan Peter Schmittmann, 57, the former CEO of Dutch bank ABN Amro found dead at home near Amsterdam with wife and daughter.




Career deaths don't count ...... but keep those nail guns away from these two former JP Morgan banksters


http://wallstreetonparade.com/2014/04/jamie-dimon%E2%80%99s-top-women-and-their-missing-licenses/



Jamie Dimon’s Top Women and Their Missing Licenses

By Pam Martens: April 15, 2014

Ina Drew, Former Head of the Chief Investment Office at JPMorgan, Testifying at the March 15, 2013 Senate Hearing on the London Whale Trading Losses
In the past two years, two of the most senior, long-tenured and talented women at JPMorgan, Ina Drew and Blythe Masters, have bid adieu to the bank and its CEO, Jamie Dimon, under less than ideal circumstances. Questions are now emerging as to whether Dimon required that these senior supervisors hold proper industry licenses for the work they performed for the bank.
Ina Drew, the former head of the Chief Investment Office, who supervised the traders responsible for losing $6.2 billion of the bank’s deposits in exotic derivatives trading in London, resigned from the firm over that firestorm on May 14, 2012. Drew had been with JPMorgan and its predecessor banks for 30 years.
In Drew’s testimony before the U.S. Senate’s Permanent Subcommittee on Investigations on March 15, 2013, Drew told the hearing panel that beginning in 1999, she “oversaw the management of the Company’s core investment securities portfolio, the foreign-exchange hedging portfolio, the mortgage servicing rights (MSR) hedging book, and a series of other investment and hedging portfolios based in London, Hong Kong and other foreign cities.”
Drew told the Senate Committee that the investment securities portfolio exceeded $500 billion during 2008 and 2009 and as of the first quarter of 2012 was $350 billion. But during the 13 years that Drew supervised massive amounts of securities trading, she had neither a securities license nor a principal’s license to supervise others who were trading securities.
We asked numerous Wall Street regulators to explain how this is possible at today’s too-big-to-fail banks. One regulator who spoke on background only told us that Drew could not hold a securities license because she worked for the bank not its broker-dealer. Only employees of broker-dealers are allowed to hold securities licenses. But apparently, not having a securities license does not stop one from supervising a $500 billion portfolio of securities that are, most assuredly, traded by someone.
It is an uncontested reality on Wall Street that if you are going to supervise persons holding a securities license, you must also hold the appropriate securities licenses yourself. Drew, sans license, was supervising traders in London who were registered with the Financial Services Authority (now Financial Conduct Authority). Included among those traders was the now infamous, Bruno Michel Iksil, the so-called London Whale.

Blythe Masters, Head of Global Commodities at JPMorgan
The situation with Blythe Masters is even more puzzling. Masters, who has worked at the bank for 27 years and announced her resignation this month, was named to the post of head of Global Commodities in 2007 and has held that post ever since. Masters has never held a Series 3 license to trade commodities nor a Series 30 to supervise commodity traders according to industry records.
Even more puzzling, according to Financial Industry Regulatory Authority records, Masters is employed at JPMorgan Securities, LLC, a broker dealer – not the bank — and holds a full roster of securities licenses – but no commodity licenses.
According to the firm’s web site: “Blythe Masters is J.P. Morgan’s head of Global Commodities, responsible for the global team that provides integrated physical and financial commodity solutions products for clients. The business provides market-making, structuring, risk management, financing and warehousing capabilities across a full spectrum of commodity asset classes.”
Despite the reference to a “full spectrum” of commodity asset classes, the National Futures Association shows that Masters was approved only as a principal for JPMorgan Ventures Energy Corporation on February 20, 2013. Commodities trading encompasses far more than just energy, e.g., metals, agricultural products, etc.
Last July, the Federal Energy Regulatory Commission fined JPMorgan $410 million for manipulating power markets in California and the midwest. Masters oversaw the division that was charged with the manipulation.

Today, the Wall Street Journal has a front page article revealing its findings that Wall Street employees who repeatedly failed the required exam to sell securities “have on average worse disciplinary records.”
What about those who never take the licensing exams at all?



And keep those nail guns away from these traders.....


http://wallstreetonparade.com/2014/04/nys-attorney-general-issues-subpoenas-to-least-lawyered-up-high-frequency-traders/



NYS Attorney General Issues Subpoenas to Least Lawyered-Up High Frequency Traders

By Pam Martens: April 17, 2014

Eric Schneiderman, New York State Attorney General
Bloomberg News is reporting that New York State Attorney General, Eric Schneiderman, has issued subpoenas to six high-frequency trading firms. The article, however, names only three firms, none of which are household names.
According to the article, Schneiderman is asking the firms, which include Chopper Trading LLC, Jump Trading LLC and Tower Research Capital LLC about the “special arrangements they have with exchanges and dark pools as well as their trading strategies.”
This is a curious approach. Why not ask the three big stock exchanges, the New York Stock Exchange, Nasdaq and BATS to hand over the names of all high frequency traders to whom they have sold expensive perks that have the effect of rigging the stock market against the average investor.
On March 18 of this year, Schneiderman gave an address at New York Law School indicating his intimate knowledge of the unfair and potentially manipulative practices taking place at the stock exchanges and, somewhat demurely, calling out Securities and Exchange Commission Chair, Mary Jo White, for not doing enough to stop these abuses.
On the subject of co-location, where the high frequency traders are allowed for a high fee to locate their own computers inside the exchange’s data centers to be close to the exchange’s main computers and shave fractions of a second off their trading speed, Schneiderman said: “In that tiny sliver of time, these firms get a first look at the direct-data feeds provided by the exchanges.  They see pricing, volume, trade and order information and use it with their sophisticated technology, and algorithms that make the systems automatic, to trade on it before others can possibly react.”
Schneiderman said this co-location also allows the high frequency traders to “continuously monitor all the exchanges for large incoming orders.  And if they spot a large order from an institutional investor, like a pension fund, high-frequency traders can instantaneously get on the other side of the trade — driving up the prices artificially.”
The exchanges are also supplying “extra bandwidth, special high-speed switches and ultra-fast connection cables to high-frequency traders, so they can get, and receive, information at the exchanges’ data centers even faster,” said Schneiderman, which is giving them a “leg up on the rest of the market.”
While not actually stating that he believes these practices are a fraud on the market, Schneiderman made it clear that he believes they are happening “at the expense of the rest of the investing public.”
Sounding a bit like President Obama on the campaign trail, Schneiderman said:
“Building tremendously lucrative advantages into markets for high-frequency traders at the expense of the investing public is wrong. The idea of the United States, and this permeates all 30 bureaus in my office, is that no one’s supposed to have a special advantage. We’re supposed to be a little more equal than the rest of the world. That’s why we didn’t have kings or aristocrats, and the idea was to have something close to a level playing field…”
One of the most serious rigging mechanisms being deployed between the stock exchanges and high frequency traders was not addressed in any detail by Schneiderman in his speech on March 18 – the exotic order types that effectively allow high frequency traders to prey on the uninformed and effectively repeal price-time priority rules that over a half million stockbrokers trading for moms and pops across America thought were still in place on the stock exchanges to provide a fair trading venue. (Not only is there a technology gap hurting the average investor but these stealth order practices have created a knowledge-gap as well.)
Just how effective these new tricks of the trade are for high frequency traders was on display in a fascinating prospectus filed by Virtu Financial Inc. on March 27. The filing said that “As a result of our real-time risk management strategy and technology, we had only one losing trading day during the period depicted, a total of 1,278 trading days.”
Anyone who thinks that level of trading success is achievable within a level playing field has clearly never worked for any period of time as a trader on Wall Street.
Virtu Financial Inc. postponed its Initial Public Offering (IPO), ostensibly as a result of the public outcry flowing from the 60 Minutes episode on March 30 where bestselling author, Michael Lewis, previewed his new book, “Flash Boys” and charged that the stock market is rigged by these high frequency traders.
Virtu acknowledges in its IPO prospectus that there’s a high-tech arms race on Wall Street, writing: “We believe that our success in the past has largely been attributable to our technology, which has taken many years to develop. If technology equivalent to ours becomes more widely available for any reason, our operating results may be negatively impacted. Additionally, adoption or development of similar or more advanced technologies by our competitors may require that we devote substantial resources to the development of more advanced technology to remain competitive.”
In his talk at New York Law School last month, Schneiderman endorsed a plan to slow down the technology arms race, indicating that there is a proposal by academics at the University of Chicago Business School, which he endorses, which would “put a speed bump in place. Orders would be processed in batches after short intervals – potentially a second or less than a second in length – but that would ensure that the price would be the deciding factor in who obtains a trade, not who has the fastest supercomputer and early access to market-moving information.”