In mid-October of 2014, the Securities and Exchange Commission (SEC) brought its first action against a high-frequency trading firm for manipulating stock closing prices. A high-frequency trading firm trades shares of stock in small fractions of a second. Talk about speed.
Because of that speed, some very computer-savvy people at Athena Capital Research LLC (Athena) thought that they could manipulate the stock market to their advantage.
In the SEC’s Order in the case, the relevant period of this manipulation took place during the six months between June and December of 2009. It took five years to find the data and then to understand what Athena had been doing.
When Athena was faced with (1) the ...