Datek Trading Scammers Fined
from the well,-it's-something dept
Unfortunately, this article doesn’t do much to explain exactly how this scam worked, but it seems that a bunch of former executives at Datek were using their own system and many completely fake accounts to fraudulently make money off of trades. They’ve now agreed to pay fines totallying $70 million dollars. As far as I can tell, they did some sort of real-time arbitrage move, taking advantage of market makers who didn’t update their prices in the system rapidly enough – allowing the fraudulent Datek accounts to make quick trades for easy money. Update: The NY Times has more details on both the scammers and the scam.