Unbelievable developments this week, ever since the story broke that Goldman Sachs were suing a developer for stealing their algo programs, and potentially using them for illegal matters and purposes.
The story actually goes back to when Goldmans announced last week that they were fed up with rock mag, Rolling Stone, over a piece claiming that the bank had “engineered every major market manipulation
since the Great Depression — and they’re about to do it again.”
Goldmans responded that it was “hysterical in both
senses of the word” and that the magazine had “cobbled together
every conspiracy theory ever written about us and injected some hyperbole
and lots of bad language and called it a story.”
Apparently Goldmans were consulting their libel lawyers.
Maybe they shouldn't as their lawyers now admit that their systems can be used for 'market manipulation'.
This is based upon the news on Tuesday that a former computer programmer at their Wall Street headquarters had been charged with using sensitive computer codes to steal trade secrets. The codes are core to Goldmans' algorithmic trading systems.
The problem is that in their case against this guy, Sergey Aleynikov (a Russian immigrant no less, how James Bond is this getting?), the bank's lawyer made the statement that this “raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.”
So, the program can be used to manipulate markets, can it?
Goldmans has virtually admitted as much, and no-one is going to let them off the hook.
In fact, GATA (the Gold Anti-Trust Committee) has already raised questions with “the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission to investigate the Goldman Sachs Group Inc. computer trading program that, according to a federal prosecutor, the bank acknowledges can be used to manipulate markets.”
This is going to get interesting ...
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...
