CFTC charges DRW
Just two months ago DRW Trading sued the CFTC – in order to avoid being charged with rigging a certain future market. A technical story of different margin / collateral treatment of OTC derivatives versus listed futures in the fixed income world. Not really my cup of tea, but here are more details and background documentation.
Watchdog not scared
Either way, Donald R Wilson (DRW) failed in scaring off the watchdog CFTC. Today they charge him and his company with banging the close in this future market. And pocketing $20m. Well, “marking” the close would be a better term, because nobody ever traded against them in the close.
The market prices did not reach the level that DRW had hoped for and expected. Rather than accept that reality, DRW allegedly executed a manipulative strategy to move the market price in their favor by “banging the close,” which entailed placing numerous bids on many trading days almost entirely within the settlement window, none of which resulted in actual transactions as DRW regularly cancelled the bids.
“DRW couldn’t accept reality”
According to the CFTC mister Wilson and his firm couldn’t accept the reality of the market prices. Not a line I would expect from an agency such as the CFTC, a nasty thing to say to trader. Full official CFTC charge here, a short but good read. An alternative good read is Bloomberg’s Matt Levine :
CFTC Sues Firm That Sued CFTC to Stop CFTC From Suing It.
First,
if the judge refers to a ‘rates expert’, drw would win easily? how come they were not able to defend the original case using a top quality academic?
how come drw only posted bids in the settlement window and not through out the day?
‘how come drw only posted bids in the settlement window and not through out the day?’ – sigh…
define ‘sigh’
Do something wrong. Make a ton of money. Get charged. Pay up, dont deny wrong doing. Work continues as usual.
stupid traders
go electronic trading, get rid of the guys that think they are smarter than all and just run a machine
die IMC/OPTIVER traders et al, die
what do you think was done wrong?
and you don’t have to advocate getting rid of the traders, excess levels of human would themselves be made redundant as and when its possible, nobody gets paid for doing nothing?
lol I get six figure salary and bonus for doing nothing
what is your role and how long do you expect it to last?
My role is to talk shit and annoy people – you know, like a manager. It will last until I get bored with the firm and find another place where I can do the same thing for a while. As long as I can pay the taxes, support my family and maintain my mistress(es) it’s all good.
if you are not adding any productive value why is management still paying your salary?
Because they like having me around. I add character to an otherwise boring office.
Is it true that donald wilson is the only billionaire in the business after thomas peterfly and hilgers ?
Sorry was kidding about peterfly
which boring office do you work in and what character do you add to it?
does hilgers act like a billionaire, is that why people keep pulling his leg about his wealth?
define “boring”
define “character”
I bet you’re just worried that you’re the one paying someone who admits to being a completely useless manager.
listen, you have to be pretty stupid to pay someone top $ for being useless, do you really think people at the top of these companies are that stupid to keep paying their incompetent management who doesn’t deliver? And pls don’t use your petty little worker bee brain to answer this rhetoric question, put yourself in the shoes of owner and see the dynamics of organisation below
If someone is smart enough to realise they’re a completely useless manager, they probably aren’t incompetent to begin with, and probably smart enough to justify their continued employment. Managers are employees too, and in the end just want their paycheque. People at the top are often so detached from what actually goes on in the company that they’d have no idea whether a manager is necessary or not. They only have word from their direct reports to work with.
Finally someone is thinking like an incompetent manager, how to get paid while being one.