Posted on 07/16/2009 6:27:05 PM PDT by ovrtaxt
Think of order flow as an input. Essentially, the software would work at any firm that had sizable order flow in a given area of the market.
Of course, but if it were based on frontrunning the software wouldn’t be the important part, the order flow data would be. It probably wouldn’t even matter to Goldman if other firms got a hold of the software they used, since they still wouldn’t have Goldman’s order flow data.
Well, there’s the thing.
Goldman caught the guy downloading the source code onto a drive. I don’t think Goldman had any intention of ANYBODY EVERY knowing about that code.
They are suing under the 1996 Economic Espionage Act, and there is scant case law under that act, which means you can ask, for example, that the proceedings be closed due to the nature of the trade secret - to minimize grave economic damage.
You can ask that it not be a jury trial perhaps.
The WSJ article is stunning. The implications are massive. Also, it’s not the most complex piece of software in the world to write either.
Essentially, you buffer orders that meet certain trading pattern criteria until you evaluate and place your own order.
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