City Sues NYSE, Claiming Market Is Rigged
The city claims in its 57-page lawsuit that the scheme began after the onset of the global economic crisis and continues to this day.
To carry out the scheme the defendant exchanges - including, but not limited to the New York and Chicago stock exchanges, and NASDAQ - together with the defendant brokerage and high frequency trading firms - among them, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley and Co., Citigroup, Credit Suisse, and the Charles Schwab Corp. - employed “devices, contrivances, manipulations and artifices to defraud in a manner that as designed to and did manipulate the U.S. securities markets and the trading of equities on those markets,” the city says in the complaint.
These “devices and contrivances” included “electronic front-running,” essentially early notice of investors’ intention to buy or sell securities; “rebate arbitrage,” a form of kickback payment; “slow-market arbitrage,” playing the price of a stock of one exchange against its price on another; “spoofing,” phony cancellation orders intended to game the market at its opening or close; “layering,” the issuance of a wave of false orders; and “contemporaneous trading,” obtaining nonpublic information regarding the trading intentions of the plaintiffs and then transacting against them, the complaint states.
More: Courthouse News Service