"That Goldman Sachs may just possibly have used security access codes and built a system to acquire trading information PRIOR to transaction commit time points at NYSE."
It is well known that GS has comprised as much as 30% of all NYSE daily traffic over the last several months and more than 50% of high speed program trading.
As a "liquidity provider" they have also been give extraordinary access to the NYSE exchange and their network. High speed quantitative trading is also well known, but in recent months various technical trading parties say that the market has been acting very strange with long held correlations falling apart. That along with the arrest of a (until recently) GS employee for allegedly stealing their code has led to some wild speculation.
"The bank [Goldman Sachs] has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways," [Asst. U.S. Attorney] Facciponti said, according to a recording of the hearing made public yesterday. "The copy in Germany is still out there, and we at this time do not know who else has access to it." Bloomberg
Which raises the question why it's unfair, if someone other than GS uses the code to manipulate markets?
Do any of the quant nerds reading Slashdot have comments on the possibility of this? Even if the less wild allegations prove true, it seems difficult to have true market pricing when a single participant controls such a large fraction of trades, and almost all crucial trades near 'the bell'."
Honesty is for the most part less profitable than dishonesty. -- Plato