So.\u00c2\u00a0 Just what happened that one day in 2010 when… out of nowhere… the stock market dived and collapsed?<\/p>\n
Some guy did i<\/a>t.<\/p>\n On Tuesday, United States prosecutors said that much of the blame for the event could be pinned on a single person: a 36-year-old man who had been boldly manipulating markets from his suburban rowhouse just a few minutes from Heathrow Airport outside London, where he was arrested. […]<\/em><\/p>\n For the latest case, it took the authorities five years to track down a rogue actor making enormous trades. And, they were led to him only with the help of an outside whistle-blower.<\/em><\/p>\n Reading this skeptical report..<\/a>.<\/p>\n The flash crash was essentially over in five minutes. But it took regulators nearly five months to come up with a theory about what happened. And in late September 2010, when the SEC and the CFTC\u00e2\u20ac\u201dthe same agency now charging Sarao with causing the crash\u00e2\u20ac\u201dreleased a joint report on what happened, they didn’t mention spoofing, let alone Sarao. Instead, they blamed a large trade by a firm out of Kansas City.<\/em><\/p>\n It’s not even clear that the feds’ new explanation is correct. As Matt Levine notes<\/a> over at Bloomberg View, regulators believe that Sarao continued to place massive fake sell orders in the years after the flash crash, but somehow that activity never triggered another crisis…<\/em><\/p>\n