FCA Goes After BAML Trader for Baiting Algorithms into Trading

[kreslik.news]

The UK financial regulator FCA has issued a fine on BAML Trader Paul Walter for.. duping algos into making trades. In a world where high-frequency trading is the norm, human traders apparently may be found guilty of “algo baiting”.

FCA’s fine of £60,000 is imposed for making about €22,000 in profits. The practice has been executed on the Dutch bond market during the summer of 2011. According to the FCA’s charges Walter entered bids into his EBS BrokerTec platform to lure in algos that increased their bids and helped push the price of the bond higher.

After the automatic trend-following algorithms were ... (read more)