![]() ![]() They show that breakdowns in market quality (such as flash crashes) have occurred in every year they examined and that, apart from the financial crisis, such problems have declined since the introduction of Reg NMS. ![]() Gao and Mizrach studied US equities over the period of 1993–2011. Some recent peer-reviewed research shows that flash crashes are not isolated occurrences, but have occurred quite often. In May 2014, a CFTC report concluded that high-frequency traders "did not cause the Flash Crash, but contributed to it by demanding immediacy ahead of other market participants". Furthermore, he concluded that by April 2015, traders can still manipulate and impact markets in spite of regulators and banks' new, improved monitoring of automated trade systems. Traders Magazine journalist, John Bates, argued that blaming a 36-year-old small-time trader who worked from his parents' modest stucco house in suburban west London for sparking a trillion-dollar stock market crash is "a little bit like blaming lightning for starting a fire" and that the investigation was lengthened because regulators used "bicycles to try and catch Ferraris". Sarao began his alleged market manipulation in 2009 with commercially available trading software whose code he modified "so he could rapidly place and cancel orders automatically". The Commodity Futures Trading Commission (CFTC) investigation concluded that Sarao "was at least significantly responsible for the order imbalances" in the derivatives market which affected stock markets and exacerbated the flash crash. Spoofing, layering, and front running are now banned. These orders amounting to about "$200 million worth of bets that the market would fall" were "replaced or modified 19,000 times" before they were cancelled. Among the charges included was the use of spoofing algorithms just prior to the flash crash, he placed orders for thousands of E-mini S
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