After a week as JLN guest editor, I’ve returned for one more day as one of today’s headlines hits a personal note. I will keep the commentary brief, and let the publicly available facts speak for themselves.
I am more baffled now than I was two-and-a-half years ago when these charges were brought against my firm and me. At the time, I didn’t know about the existence of the NFA report, or that the CFTC had evidence of our efforts to transact with MF Global when it accused us of cancelling orders to avoid transacting – both of which are described in today’s Bloomberg article. Now that we know more facts, I have to wonder: what were the Commissioners told before authorizing the Complaint? Are the Commissioners even aware of the position the government’s proposed “expert” has taken, namely that unmatched bids and offers in illiquid markets do not contribute to price discovery [link to: CFTC expert witness report]? The lack of transparency in this case is eye opening.
There has been other interest in this case, when the complaint was first filed and more recently. Take a look to get a fuller picture of what has occurred.
Here are some other articles related to this:
Manipulation or Brilliant Trade? The Curious Case of Don Wilson
Matthew Leising – Bloomberg
When Don Wilson spotted a chance in 2010 to take another bite at a trade that had mostly eluded him as a younger man, he never expected he’d be defending his actions six years later in a Manhattan federal courtroom.
A former pit trader who rose from the floor of the Chicago Mercantile Exchange to create the 700-person derivatives powerhouse DRW Holdings LLC, Wilson is a respected industry executive. Early in his career, the University of Chicago graduate with a toothy smile built quantitative models in the off-hours to guide his trading. That same methodical approach led him to assemble a group six years ago to determine if a pricing mismatch worth tens of millions of dollars was staring them in the face.
Big Trader Strikes Back Against CFTC – Wall Street Journal
Exchanges Clash With Regulators Over Market-Manipulation Case – Wall Street Journal
Firm Sues to Stop CFTC From Calling It a Bunch of Cheaters – Bloomberg View
Enjoin This! – Streetwise Professor
2015 08 18 Rebuttal Report of Robert M. MacLaverty (PDF)