Goldman Code Theft BOMBSHELL?

[girl gone mad]

Goldman Code Theft BOMBSHELL?
By Karl Denninger, http://market-ticker.denninger.net/archives/1192-FLASH-Goldman-Code-Theft-BOMBSHELL.html">Market Ticker

http://www.dailykos.com/storyonly/2009/7/7/750786/-Incredibly-Shrinking-Liquidity-as-Goldman-Flushed-Quant-Trading">Something really ugly popped up on Daily Kos yesterday late in the afternoon.....

...GS, through access to the system as a result of their special gov't perks, was/is able to read the data on trades before it's committed, and place their own buys or sells accordingly in that brief moment, thus allowing them to essentially steal buttloads of money every day from the rest of the punters world.

Two things come out of this:

1. If true, this should be highly illegal, and would, in any sane country result in something like what happened to Arthur Andersen...

(2. ... is way off point....)

God help Goldman if this is true and the government goes after them. This would constitute massive unlawful activity. Indeed, the allegation is that Goldman alone was given this access!

God help our capital markets if this is true and is ignored by our government and regulatory agencies, or generates nothing more than a "handslap." Nobody in their right mind would ever trade on our markets again if this occurred and does not result in severe criminal and civil penalties.

There apparently is reason to believe that Sergey might have been involved in exactly this sort of coding implementation. Specifically, look at the patent claims cited on DailyKos; his expertise was in fact in this general area of knowledge in the telecommunications world......

This is precisely the sort of thing that a Unix machine, sitting on a network cable where it can "see" traffic potentially not intended for it, could have an interface put into what is called "promiscuous mode" and SILENTLY sniff that traffic!

ASSUMING THE TRAFFIC IS PASSING BY THE MACHINE ON THE WIRE THIS IS TRIVIALLY EASY FOR ANY NETWORK PROGRAMMER OF REASONABLE SKILL TO DO. IF THAT TRAFFIC IS EITHER UNENCRYPTED OR IT IS EASY TO BREAK THE ENCRYPTION.....

Folks, I have no way to know what the code in question does, but if there's anything to this - anything at all - there is a major, as in biggest scam of the century - scandal here - something much, much bigger than Madoff or Stanford.

http://market-ticker.denninger.net/archives/1192-FLASH-Goldman-Code-Theft-BOMBSHELL.html">More...

[BadgerKid]

1. It wouldn't be the only suspected market manipulation in general. n/t

[Uben]

2. I stopped buying stocks last year

Apparently, most people have, sitting on what they have till the market rebounds. But, if they aren't buying stocks, it can't rebound......so we wait. Sell your stock now, at least you will get something for it. That's what the savvy execs are doing.
Until they can come up with a way of trading stocks where the system is not compromised, the market is dead.

[sendero]

3. I've believed for some time..

.. that the stock market is a rigged game - the PTB just cannot STAND all that 401k money going un-fleeced - so I have no problem believing this at all.

Here's what sucks, even if it is true nothing will happen. NOTHING.

[mopinko]

6. that's why 401ks were invented.

not to give us access to our "pension" money, but to give wall street access. not only playing with our money, but our money that we can't touch for the next 20-30 years. for most people, anyway. we have more control than most people, but we still certainly have no option to pull it out completely.

[sofa king]

4. Encryption doesn't matter...

...If the access was provided to Goldman by two acronyms known for surveillance and covert operations.

[loudsue]

5. I agree: And there are a LOT of other countries whose citizens bought stocks

And it is likely that those trades had already been manipulated. This whole thing STINKS to high heaven, and should be thoroughly investigated.

K & R

:kick:

[corkhead]

7. They are too big to fail at stealing our money. Move along, nothing to see here.

:banghead:

[grasswire]

8. this is bigger than the PROMIS scandal several decades ago

I've been thinking that it's time for someone to bring that up here on DU to educate the younguns about it.

[troubledamerican]

9. Denninger is VERY reliable and very astute

Max Keiser also reported on this during the most recent New Zealand Truth About Markets podcast.

Their computer program trading is ALSO (deregulated since October) no longer required to be reported nor subject to transparency.

This computer program trading gets "fraction-of-a-second" advance info which is more than enough time for the computers to process data & make trades.