The Hound highlights a broken system
The Sunday Times Navinder Singh Sarao, the Hounslow-based trader charged with causing the 2010 Wall Street “flash crash”, has pleaded guilty to “spoofing” the market – placing fake orders on exchanges to trick other traders, says Iain Dey. It appears that “one bloke operating from his bedroom with a home computer” really did manage “to outmanoeuvre the global financial system”, disproving the theory that super-fast computerised trading gives Wall Street firms an unbeatable advantage. The Hound of Hounslow’s “particular brand of market manipulation” is illegal in the US, but not in Britain. Indeed, had he worked at a big hedge fund, his lawyers would probably have described his dodgy trading strategy as his “edge”. The debacle highlights “a broken system”. Huge fake bets should be detected and blocked before they can do damage; yet professional investors piled in behind Sarao, causing a giant crash. “Spoofing the markets should be impossible, rather than illegal.” If the Hound had been prowling the markets after last week’s election, rather than “shackled in an orange jumpsuit”, I reckon he would have led “the robo-traders on a merry dance”.
Ross, 78, a “softly spoken” private equity investor, is “an old Wall Street hand” who specialises in snapping up distressed assets; he is considered “a bit of a cowboy” in some quarters. He served as an economic adviser throughout the campaign and was one of the main articulators of Trump’s trade policy. Mnuchin, 53, also “joined Team Trump early” as finance chairman, and is a long-term business associate of Trump’s. A former Goldman Sachs partner, Mnuchin went on to found Dune Capital Management and “scored big” in the restructuring of IndyMac bank after the 2008 crisis. Latterly, he has been financing Hollywood movies. Goldman colleagues call him a tough, ruthless operator who is not particularly adept at “navigating relationships”.