Michael Lewis has a lot of questions about the 2010 flash crash — and the arrest of Navinder Singh Sarao in connection with it. (Like why did it take so long?)
But there’s one thing the Flash Boys author is sure of: Sarao is “not some kind of exception to the standard operating procedure in finance. He’s a parody of it.”
Lewis outlined his thoughts in a Bloomberg View column on Friday, poking holes in the argument that regulators simply didn’t have enough information in 2010 to go after Sarao.
In fact, the CFTC spoke with a data analyst who tracked sketchy trading behaviour during the flash crash and even claimed to spot Sarao’s spoofing, Lewis wrote.
Which leads him to more questions, like, if the CFTC was aware it, why did they take so long to do anything? And why didn’t they work with the SEC on that regulator’s investigation? And why didn’t the fund that Sarao used — Jon Corzine’s former MF Global — raise any red flags when Sarao repeatedly placed and cancelled trades?
And, seriously, where was the CME while this was happening?
Among all of these queries, Lewis really wants to know two things in particular:
(1) What fools — or what fools’ trading algorithms — were stupid enough to fall for this?
(2) Why didn’t Sarao run for the hills after the crash? Why did he keep on spoofing?
Wall Street never ceases to entertain, and Lewis, of all people, knows it.
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