Meanwhile In London, A Stunning Scene Emerges

When one thinks of lines of people waiting patiently to obtain "hard currency", one may think Russia, as was the case in December 2014 when the currency was plunging...

... or Greece in the summer of 2015...

... or even Geneva in the aftermath of the shocking January 2015 Swiss revaluation:

... one would certainly not expect it in the city considered by many as the capital of capitalism: London.

And yet, as the FT shows in what may be the first of many such stunning images, "long queues stretched outside foreign exchange bureaux in the City of London on Thursday as people cashed in their pounds ahead of the EU referendum."

Behold: London, circa right now.

Line in front of a Longon foreign exchange bureau.

More from the FT:

In scenes reminiscent of the queues that formed outside branches of Northern Rock and led to its collapse in 2007, City workers queued impatiently around the block outside forex bureaux on Wednesday afternoon. Summaya, a 31-year-old employee of a retail bank who declined to give her surname, lined up outside the Foreign Exchange Services shop on Cannon Street. She said she was going to change “several thousand pounds” into US dollars and euros because she was convinced the public mood was shifting in favour of Brexit.

“I’m protecting my money. I will stick it under the mattress until Friday,” she said, adding that Tuesday night’s televised debate had swung opinion among her friends and colleagues in favour of Brexit. “People are changing their views.”

Odd: one would not get that impression based on the several moneyed bettors who were skewing the bookies lines. Luckily, sentiment on the ground is avaiable and much more actionable than manipulated indirect data. In any case, this is what is really taking place in the UK as of this moment:

The Post Office said Tuesday’s sales of foreign currency were nearly four times higher than the same date last year, while sales in branches were nearly 49 per cent higher. Currency sales on Tuesday were up 74 per cent year on year, said the Post Office.

Thomas Cook said: “There’s been a surge in customers buying euros in the last six weeks and euro sales have been consistently strong, building day by day.”

Several economists predict a Leave outcome would trigger a dramatic fall in the pound when markets open on Friday, while a vote to Remain should see the pound rally. But several analysts said this week’s sharp sterling recovery probably limited the scope of the currency’s rise.

Daniel Priori, an Italian who has been working as a cashier at the International Currency Exchange kiosk at Waterloo station for a year, said he and his two colleagues had dealt with many more customers than usual.

Asked why, he replied: “Because they are scared about tomorrow.” He said the majority of transactions were people changing sterling into euros.

To be sure, not everyone is terrified of the inevitable collapse in sterling in case of Brexit (which is what the Scaremongering campaign is all about). Some just want some vacation money...

[S]everal of those queueing were exchanging their holiday money. Standing in a queue outside Thomas Exchange on Cannon Street, 44-year-old Chris Nobbs, who works in insurance, said: “I go to Alicante in Spain in a couple of weeks, so I’m just taking my euros out today instead of next week. I do not take more than what I need on holiday, but who knows, maybe this will earn me some extra cups of coffee.”

In the queue outside City Forex, on Leadenhall Street, City worker Ed was planning to change “a few hundred quid” before travelling to Greece on holiday next week. “I don’t have a strong sense of the [referendum] result, but just want to hedge against the downside. I’ll change half now and half later,” he said.

... But it's safe to say that the vast majority of those lining up have far more existential concerns. Whether or not these are validated will be revealed as soon as the FX markets open for trading after the Brexit vote is released.

http://www.zerohedge.com/news/2016-06-22/meanwhile-london-stunning-scene-emerges 

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HFTs Lose: IEX Granted Exchange Status As SEC Says The Speed Race Is Over

Earlier this week when we reported that the SEC staff had unexpectedly granted approval of the IEX exchange, the culmination of a long battle between free and unrigged market supporters on one hand and the HFT lobby and the NY Fed's "arms length" HFT operation and gargantuan retail order internalizer better known as Citadel on the other, we warned not to get too excited: "it is possible that the final vote will contain some variation on "protected quote" clause, thereby giving IEX its long-awaited exchange status but stripping its clients of the much needed anti-HFT protections, which are precisely the reason why so many vocal supporters of IEX have emerged in recent months."

We were wrong: in a late vote on Friday evening, the Securities and Exchange Commission voted to certify IEX as the U.S.’s 13th national stock exchange, giving the startup a license to challenge the Intercontinental Exchange, Nasdaq. and BATS. More importantly, the SEC’s decision resolved a clash over whether its rules, which sped the transition to fully electronic markets, allow IEX to use a “speed bump” that slows orders by just 350 millionths of a second, as popularized in Michael Lewis' book Flash Boys. Ultimately IEX will get unconditional status.

We were also partially right on the "protected quote" debate: as the WSJ writes, SEC Chairman Mary Jo White, and Commissioner Kara Stein, a Democrat, approved IEX’s bid. Republican Commissioner Michael Piwowar backed the broader move to approve IEX as an exchange, but dissented from a decision to give IEX what is known as a “protected quote,” which - as noted above - requires brokers to send orders to IEX when it shows the best price across all 13 national stock exchanges.

Having won approval, IEX will effectively become the first HFT-free venue, and will likely attract substantial institutional interest as the risk of being frontrun by HFT parasites is no longer present. Ironically, its competitors had said that IEX' model threatens investor benefits, when the reality was precisely the opposite.

Citadel and high-frequency trading firms deluged the SEC with letters that argued IEX’s speed bump would violate rules that require orders be “immediately accessible” to traders. Intercontinental Exchange Chief Executive Jeff Sprecher, whose firm owns the New York Stock Exchange, told analysts in February that granting IEX permission would be “un-American” because it would create a new “monopoly,” with IEX as the only exchange with a speed bump.

Citadel’s founder, billionaire Kenneth Griffin, got personally involved in the fight against IEX, meeting with the SEC as recently as June 3 to lobby against its exchange bid, according to a regulatory notice.

We are delighted, if stunned, that the SEC disagreed.  That said Citadel's anger was palpable: “Today’s decision will test and potentially reverse the gains in fairness, efficiency and transparency that have been made to our markets over the last decade,” Citadel said. “We must be vigilant to identify unintended consequences, and firm in our commitment to equitable and consistent treatment for all investors.”

What is surprising is that it is well-known among market participants, and originally reported here, that the NY Fed transacts by way of Citadel at key market inflection points, when bursts of momentum ignition out of the Chicago HFT powerhouse prevent ther market from tumbling when they break a downward spiral in prices. A question thus emerges if the SEC's snub to Citadel was also an indirect snub to the NY Fed and market manipulation.

While it remains to be seen what the SEC's rationale was for granting IEX exchange status, one possible explanation is that even the SEC had noticed the unprecedented collapse in investor and trader interest, especially at the retail level, as the topic of how rigged the market has become is now a daily occurrence. As such the SEC felt compelled to take a stand. Or maybe not, and there is some other ulterior motive. We hope to find out.

For those unfamiliar with the IEX story, the exchange says its 350 microsecond delay is just long enough to protect investors from predatory high-speed trading that can front-run the orders of slower investors. Opponents such as Citadel LLC, the hedge-fund manager and electronic market maker, had warned that any delays would create stale prices and the potential for manipulation.

“It does mark a pendulum shift where ‘speed is king’ may have reached the furthest point it can go,” said Andrew Upward, head of market structure at brokerage Weeden & Co. “They’ve had a victory in this debate about the importance of speed in markets, and it’s a setback for those who think speed and efficiency are the end all and be all.”

On its website, Brad Katsuyama, CEO of IEX wrote the following letter of gratitude:

To our Sell-Side and Buy-Side Partners,

On behalf of the entire IEX team, I would like to sincerely thank you all for supporting us throughout our application to become an exchange. We are thrilled that the SEC has approved our Exchange Filing which puts us on track to commence a symbol-by-symbol roll-out on August 19th, concluding on September 2nd.

It's been quite a journey from working in a windowless room with no money in 2012, to launching our ATS, and now completing the lengthy (and I'm sure for many…tiring) Form 1 process.

We have faced several obstacles along the way and we learned along the way, but we hope our partners realize that our team's hearts and minds are in the right place – our goal is to bring real competition to the exchanges by challenging the rising cost model for data and technology while also protecting investors and delivering superior execution quality.

The IEX team is extremely excited about the road ahead, and we are grateful to be in the position to improve fairness, simplicity and transparency in our industry.

Thank you again for your support.

That said, the SEC’s decision may not be the end of the fight. Last month, attorneys for Nasdaq argued that the SEC could be sued if it approves IEX. The lawyers said the SEC would first have to change its own rules to explicitly allow for a speed bump. Absent that step, the lawyers wrote, the SEC lacked the authority to approve IEX’s proposal.

To this, the SEC issued an interesting response: addressing concerns about the legality of speed bumps - widely used by most of IEX's exchanges however in an inverse way, where premium paying clients are exempt from delays which are then abused by HFT frontrunners, the SEC separately said that delays of less than one millisecond (less than the time it takes to blink an eye) are consistent with its Regulation NMS. This is what the SEC said in its updated guidance under Reg NMS:

The Staff believes that, consistent with the Commission’s interpretation regarding automated quotation under Rule 600(b)(3) of Regulation NMS, delays of less than a millisecond are at a de minimis level that would not impair fair and efficient access to a quotation, consistent with the goals of Rule 611.  The Staff’s view is informed by the efficient operation of the markets and the geographic and technological latencies experienced by market participants. Today, a one millisecond intentional access delay is well within the current geographic and technological latencies already experienced by market participants when routing orders between trading centers.  Accordingly, the Staff believes that such a delay would be de minimis and consistent with the Commission’s interpretation of “immediate” as used in Rule 600(b)(3) of Regulation NMS.

The Staff notes that the Commission’s proposed interpretation included guidance reflecting a sub-millisecond standard.  Though the Commission did not adopt that guidance as part of its final interpretation, the Staff notes that commenters on the proposed interpretation were divided on the appropriateness of an intentional access delay but did not advocate for a different specific standard.  Further, the Staff believes the sub-millisecond standard is a reasonable line to draw, as it is broadly consistent with the latencies experienced by market participants today when routing orders around the primary exchange data centers, and is well within the maximum geographic latencies experienced when routing orders to the most geographically remote exchange data center.

The Staff acknowledges that market participants using the most sophisticated technology may today encounter access delays of substantially less than one millisecond when accessing the quotes of a single exchange whose data center is co-located with their own or located nearby.  However, even the most technologically advanced market participants today encounter delays in accessing protected quotations of other “away” automated trading centers that can substantially exceed one millisecond, that either are transitory (e.g., as a result of message queuing) or permanent (e.g., as a result of physical distance).  In today’s market environment, the Staff considers that intentional delays of less than a millisecond in quotation response times are de minimis in that they would not impair a market participant’s ability to fairly and efficiently access a quote, consistent with the goals of Rule 611.  While the Staff believes that intentional access delays that are less that one millisecond are de minimis, that does not necessarily mean that all intentional delays that are one millisecond or more are not de minimis.

The technical interpretation of the above is that according to the SEC, IEX's 350 microseconds delay is negligible, and thus the market is automated and the quote is protected.

The far more important practical interpretation, is that the SEC has set a ceiling for what it deems the speed race among HFT firms, which over the past decade have moved from fiber optics, to microwaves to lasers in their endless quest to be faster and quicker than their competitors in order to frontrun them.

Well, no more, because with its decision, the SEC has capped what technological advancement in trading can achieve going forward, as now a 350ms delay will become the norm, while anything below 1 millisecond is deemed a de minimis delay. 

This is catastrophic for HFTs for whom microseconds mean all the difference between profit and loss.

And once the vast majority of the trading public shifts over to IEX which is by definition HFT free, it will mean that the HFT scourge, already having largely cannibalized itself over the past several years, is about to end.

This is tremendous news, as it puts to rest a key part of our crusade launched in April 2009 when we first explained just how destructive for market functioning HFTs really are.

Now we can shift all our attention to central banks, the last remaining violator of free and efficient markets.

http://www.zerohedge.com/news/2016-06-18/hfts-lose-iex-granted-exchange-status-sec-says-speed-race-over

Don’t Tell Anybody About This Story on HFT Power Jump Trading

Far from Wall Street in a Chicago neighborhood once synonymous with urban blight, two futures industry veterans are using secrecy and speed to mint fortunes.

Their firm, Jump Trading LLC, was all but invisible until it was among six companiessubpoenaed in April by New York prosecutors. Jump has ascended the ranks of high-frequency traders during the past 15 years to become one of the top firms on the Chicago Mercantile Exchange, where $925 trillion of derivatives changed hands last year. Its annual revenue has exceeded half a billion dollars.

The company was founded by traders Bill DiSomma and Paul Gurinas, whose level heads caused them to stand out in the cacophony of a Chicago trading floor. Today, the pair parcel money among 20 or so teams, each guarding its computer models from the others to trade stocks, bonds and commodities with strategies that go almost as fast as light.

“Billy was one of the few upright, stand-up guys in the pits,” said Yra Harris, owner of Praxis Trading who knew DiSomma when they worked in the Chicago trading pits during the 1990s. “He had a very good presence. There were all kinds of games being played in the pits, but he wasn’t one of those who messed others around.”

Befitting its history of stealth, neither the firm nor its principals spoke for this article, and three people familiar with the matter said former employees were told not to speak with Bloomberg News.

‘Low Profile’

Jump’s reluctance to speak comes as arrangements between financial exchanges and HFT firms are being examined by New York Attorney General Eric Schneiderman and the U.S. Commodity Futures Trading Commission. Jump hasn’t been publicly accused of wrongdoing by any government investigator.

“Although Jump is well known and respected within the industry, they keep a very low profile beyond the narrow confines of electronic trading,” said William Sterling, former chief of UBS AG’s global equities electronic business who co-runs Headlands Technologies LLC, a quantitative trading firm.

Jump’s headquarters are north of Chicago’s financial district in an area once dominated by one of the nation’s most dangerous public-housing projects, the Cabrini-Green Homes, whose high-rises were demolished during the last decade. Its offices are in the former warehouse of Montgomery Ward, a remnant of the city’s days as the mail-order capital of the U.S.

Jump has about 350 employees who also work in offices in New York, London and Singapore, according to a version of its website that was deleted earlier this year. While the closely held company, which trades with its own money, makes few disclosures about its inner workings or finances, there are clues to its size.

Public Filings

Some of its financial filings are public. In 2010, Jump reported net income of $268 million and operating revenues of $512 million for that year, according to documents filed with the U.S. Securities and Exchange Commission. Profit amounted to $316 million in 2008, according to another filing with the regulator. At the end of March 2014, it owned U.S. stocks valued at $239 million, according to data compiled by Bloomberg from an SEC filing.

Last year, Jump paid CME Group Inc., the world’s largest futures exchange, $83 million in trading fees while receiving about $17 million for market making activities, according to a separate SEC filing that doesn’t identify Jump by name.

In April, Jump sought to force Twitter Inc. to reveal who was posing as one of its employees posting tweets. After Bloomberg News in April revealed that Schneiderman subpoenaed Jump as part of an industry investigation, the trading firm erased most of its website.

‘Made Billions’

“From what I understand, they’ve made billions in profits,” said James Koutoulas, chief executive officer of Typhon Capital Management LLC in Chicago, who said he has friends with ties to Jump. After the controversy stirred by Michael Lewis’s book “Flash Boys,” which said the U.S. stock market is rigged, “the high-frequency trading guys are trying to avoid any type of publicity,” he said.

Neither DiSomma, 49, nor Gurinas, 46, responded to phone or e-mail requests for interviews, and Jump didn’t respond to messages sent to its “media inquiries” e-mail address. The firm declined to meet with Bloomberg News on an unscheduled visit by a reporter to their offices in April. Subsequent meetings with Jump’s chief operating officer, Matt Schrecengost, arranged by Tessa Wendling, the firm’s general counsel, were canceled. She didn’t return phone calls or e-mails seeking comment.

Innate Humility

Humility is innate in Gurinas, according to his mother.

“He doesn’t like stories about him, and so wouldn’t want any of his friends to talk about him,” Nola Gurinas said in a phone interview.

While some high-frequency firms were created by computer programmers, DiSomma and Gurinas were pit traders at the CME -- the guys who shout and wave their arms to get the best prices. They met in 1992, and, as financial markets started migrating to electronic trading, they saw the potential of using computers to take advantage of price discrepancies in different markets, a tactic called arbitrage.

In 1999, DiSomma and Gurinas left to start their own firm, Akamai Trading LLC, partnering with John Harada. William Shepard, a board member of CME Group since 1997, bought a stake while agreeing not to get involved in management, according to a former Jump employee. Harada left to co-start rival Allston Trading LLC, and DiSomma and Gurinas changed Akamai Trading’s name in 2001 to Jump, a nod to how traders attract attention to themselves on exchange floors.

CME Link

Shepard is the only CME Group director without a photo next to his biography on the exchange’s website. His links to Jump require the exchange to disclose any financial relationship between the two companies because of his status as a board member. CME Group didn’t name the firm he works for in the regulatory filing earlier this year that disclosed the payments between Jump and the exchange. Shepard didn’t return phone calls or e-mails seeking comment.

CME Group’s conflict of interest policy prohibits board members from voting on matters where they could stand to benefit, said Anita Liskey, a spokeswoman for the exchange. She declined to comment on Shepard or Jump.

Jump hired scientists, mathematicians and programmers to build complex algorithms for trading U.S. and European equities, futures, currencies and bonds at speeds measured in fractions of a second. Unlike other firms that lease microwave towers to shave milliseconds off the time it takes to send trade orders in the U.S. and Europe, Jump buys them through a subsidiary, including one tower in Belgium that was once used by the North Atlantic Treaty Organization.

‘Industry Leader’

“We have become an industry leader, quietly setting the standard for sophisticated trading strategies,” Jump said on a now-erased version of its website.

Jump is one of the few HFT firms that have made the investment to become a clearing member at Chicago-based CME Group. That means it pays the lowest trading fees in return for maintaining preset capital minimums, according to CME Group’s rules. It also must contribute cash and securities to CME Group’s clearinghouse default fund.

DiSomma and Gurinas, who grew up in the Chicago area and graduated from the University of Illinois at Champaign-Urbana, are opposites, according to former employees. DiSomma is outgoing and cracks jokes, while Gurinas is reserved and prefers the quiet life, people who know them said.

‘Quiet Guy’

Scott Davis worked alongside Gurinas in the Standard & Poor’s 500 Index futures pit during the late 1990s. “He was not your typical loudmouthed, boisterous guy in the pit,” said Davis. “He was a quiet guy. He went about his business.”

DiSomma lives modestly by Wall Street standards. He sometimes drove to work in a pickup truck and owns a 111-year-old house in Chicago’s Oak Park suburb -- an area known for the diverse economic backgrounds of its residents. DiSomma bought his house, located a block south of railroad tracks, for $645,000 in 1999, according to county records. By contrast, the founder of another high-speed trading firm, Virtu Financial Inc.’s Vincent Viola, is selling his 19-room Manhattan townhouse for $114 million, real-estate listings show.

DiSomma also owns a 623-acre (2.5 square kilometers) farm in Cuba, Illinois, about 200 miles (322 kilometers) southwest of Chicago where he hunts for deer, pheasant and turkey and fishes for largemouth bass, according to photos on the property’s website.

Hospital Donation

His family foundation had $29.8 million at the end of 2012, according to the latest tax filings. DiSomma donated $25 million to a hospital and medical college in Peoria, Illinois, in 2011, according to the Journal Star, a newspaper in the city. The hospital had treated his daughter after she was injured in an all-terrain vehicle accident.

“At Jump Trading, what we do ... it’s not exactly God’s work,” DiSomma said in February 2010 interview with the Journal Star. “What you guys do down here is closer to God’s work,” he said referring to OSF Saint Francis Medical Center’s children’s hospital, which used DiSomma’s donation to build a training facility called the Jump Trading Simulation and Education Center.

Gurinas, whose wife is a recruiter at Jump, lives with his family in Lincoln Park, an upscale neighborhood on Chicago’s north side. He spent $3.1 million in 2006 on a 3,690-square-foot home, according to the Cook County Assessor. Gurinas also owns land and aranch in Montana. A Jump affiliate has a microwave license in Missoula, Montana.

Government Reports

One of the firm’s specialties is trading quickly on the information contained in government statistical releases, according to two competitors of the firm and a former employee. Jump pre-loads its trading algorithms based on whether, say, the unemployment rate will rise or fall, then executes the strategy within tiny fractions of a second following the announcement, the former employee said.

The programmed trades often exploit price differences between exchange-traded funds based on the S&P 500 stock index and futures based on the S&P traded at CME Group, the former employee said. They follow this arbitrage across many equity indexes and futures, such as the Nasdaq or Russell groupings of stocks, as well as in markets in the U.K. and Germany, the person said.

To succeed in the U.S., Jump needed the fastest connection between the data center for the New York Stock Exchange in New Jersey and CME Group’s facility outside Chicago.

Saving Time

Then, as now, firms competed fiercely to shave milliseconds off the round-trip time. That meant if Jump had signed a lease on one fiber-optic network and then a faster one was built later, it would rent space on that one, too, the former employee said. At one point, the firm had access to four distinct fiber-optic lines, the former employee said.

The firm was also among the first to use microwave towers to send information between Illinois and New Jersey, according to executives at rival firms. Jump also uses microwaves in Europe, including a tower it bought last year that relayed messages for the U.S. military during the Cold War. Though it can carry less data, microwave can travel distances in roughly half the time of even the most advanced fiber-optic cables.

Jump guards its brand. In April, it filed a petition in an Illinois circuit court to compel Twitter to disclose who was behind an account using the name “jumptrading@algoswild.” Jump said the account was unauthorized and it needed the name of the account holder “who may be responsible in damages for impersonating Jump Trading and infringing Jump’s intellectual property, including its trademarks.”

Case Dropped

Without specifying why, Jump and Twitter requested that the case be dismissed at the end of June, which it was, according to court records in Chicago. The Twitter account is no longer active. Stacie Hartman, a lawyer for Jump listed on the petition, and Twitter’s legal representative, Jade Lambert, didn’t return phone calls requesting comment.

Jump’s industrial-style offices, which occupy two floors of the eight-story building, are amishmash of concrete pillars, exposed overhead cabling and sleek lighting and glass doors.

The office atmosphere is akin to a Silicon Valley startup, with employees dressing casually. They have catered lunch every Friday, company-sponsored happy hours and sporting events. The firm holds annual summer picnics and holiday parties have been held at the Art Institute of Chicago and the Field Museum.

‘Highly Sought’

“Jump is among the high-frequency trading shops that is highly sought after by our candidates, who’ve often told us they have a very strong work-hard-and-reward-hard culture,” said Deepali Vyas, founder of VnV Partners, a recruitment firm in New York.

While Jump describes itself as having a “casual atmosphere and flat organizational structure,” according to a former version of its website, it has an unusual setup compared with rivals.

Jump rents out computers and other infrastructure to its traders, who are organized into independent trading teams. The groups operate as separate cost centers and are staffed by as few as two people or as many as about 20, according to two former employees. Some groups trade across markets while others focus on one.

Jump applies its secrecy ethic within the firm. The teams don’t share information about trading strategies with each other -- profitable groups are rewarded with more technology or money to trade with, former employees said.

Founders’ Teams

DiSomma and Gurinas sit with the traders and each have their own teams. Jump Core Strategies, run by Gurinas, caused resentment within the firm because of the growth of its assets, former employees said.

Among the successful teams are Statistical Trading Group, or STG, which has been run by former Citadel LLC traders Tom Gallagher and Satyanarayana Dharanipragada. Other groups have been led by Igor Pavlovsky, a Massachusetts Institute of Technology graduate who trades currencies, and ex-Citadel employees Ken Terao and Alexei Kamenev. Messages left for Gallagher, Dharanipragada, Pavlovsky and Terao weren’t returned, and Kamenev declined to comment.

An exodus of employees to Jump from Citadel was the subject of a clash between billionaire Ken Griffin’s Chicago hedge-fund firm and Jump in 2012. Citadel said former workers may have taken proprietary trading strategies and computer code worth hundreds of millions of dollars to Jump. Jump said that Citadel was misusing the courts to get information on a competitor.

James Chiu

An Illinois judge rejected Citadel’s bid to compel Jump to identify ex-employees who joined the firm since 2005, and any strategies they later developed. The case was dismissed in October 2012.

At Jump, James Chiu -- whom ex-employees said was in the trading firm’s Oceans group -- broke CME Group rules in 2010, according to a CME Group disciplinary memo from 2014.

A CME Group panel found that from Aug. 30 through Sept. 15, 2010, Chiu manually entered orders, supplementing trades that he had already placed, then canceling them before his other orders could be executed, the exchange said in a March 3, 2014, notice on its website. His actions potentially disrupted the market, the panel said.

The exchange said Chiu was employed as a proprietary trader by a member firm, but didn’t name Jump in the disciplinary action. The panel found that Chiu broke the exchange’s rule prohibiting “dishonorable or uncommercial conduct,” among others. Chiu, whose LinkedIn Corp. profile says he was a former team leader at Jump, settled with the CME Group without admitting or denying wrongdoing. He was ordered to pay a $155,000 fine and was suspended from any trading on the exchange’s markets for two months.

Predicting Future

Chiu, who now runs his own proprietary-trading firm, Vatic Labs, in San Francisco, said in a phone interview that CME Group issues disciplinary actions all the time and his was nothing out of the ordinary. Vatic is a word meaning something that describes or predicts what will happen in the future.

About two months after the CME Group rule violations that Chiu was later punished for, DiSomma, Gurinas and Schrecengost met with then-chairman of the CFTC, Gary Gensler. They discussed the definition of spoofing -- or illegally canceling bids and offers quickly after placing them in order to create a false impression of demand -- as well as high-frequency trading and the May 6, 2010, market plunge known as the flash crash, according to themarket regulator’s website. The meeting was part of the regulator’s efforts to implement new market rules stemming from the Dodd-Frank Act.

As for his old firm, Chiu hewed to the company line.

“I’m not allowed to talk about my time at Jump,” he said.

http://www.bloomberg.com/news/articles/2014-07-23/don-t-tell-anybody-about-this-story-on-hft-power-jump-trading