Former Goldman Programmer's Conviction Overturned

i_want_you_to_throw_ writes "The legal woes will soon be over for Sergey Aleynikov, a former Goldman Sachs Group computer programmer who had been convicted of stealing part of the Wall Street bank's high-frequency trading code. A federal appeals court overturned his conviction and recommended acquittal. We previously discussed this story when he was sentenced to 97 months in prison. It will be interesting to see their reasoning (an opinion is to be released) as well as what this may mean for other programmers developing high frequency trading code."

Re:Shouldn't be legal to use in the first place.

[Anonymous Coward]

"liquidity" has no place in an investment system, it's only good for speculative investing, which is just gambling

I don't understand it, therefore it's bad.

Liquidity is really important. It's the ability to resell an asset. Buy and hold forever is great for Warren Buffet, but it is not so great for investors who want to sell stock in the future to finance their retirement or their kid's education.

Re:90% reduction

[Rockoon]

The New York Times wrote [that] the joint report then noted "Automatic computerized traders on the stock market shut down as they detected the sharp rise in buying and selling." As computerized high frequency traders exited the stock market, the resulting lack of liquidity "...caused shares of some prominent companies like Procter & Gamble and Accenture to trade down as low as a penny or as high as $100,000." These extreme prices also resulted from "market internalizers," firms that usually trade with customer orders from their own inventory instead of sending those orders to exchanges, "routing 'most, if not all,' retail orders to the public markets -- a flood of unusual selling pressure that sucked up more dwindling liquidity."

2010 Flash Crash [wikipedia.org]

Re:90% reduction

[mrops]

That is the problem with the entire stock trading mentality. Stocks are viewed as commodity that makes the investor rich, no one views them as investing a company that will succeed with the investor's money.

Re:90% reduction

[Anonymous Coward]

It's another $40 to sell.... those are trades too.