Latency Arbitrage

One way or another, that money is coming out of your retirement account. Think of it like the old movie The Sting. High-speed traders already know who has won the horse race when your mutual fund manager lays his bet. You’re guaranteed to come out a loser. You’re losing in small increments, but every mickle makes a muckle — especially in a tough market.

— Make $377,000 trading Apple in one day

Financial innovation! The system works!

Rotten Heart

The most memorable incidents in earth-changing events are sometimes the most banal. In the rapidly spreading scandal of LIBOR (the London inter-bank offered rate) it is the very everydayness with which bank traders set about manipulating the most important figure in finance.

The Economist: The rotten heart of finance

It’s getting harder and harder to believe that the system isn’t thoroughly rigged by the bankers. Heads or tails, they win and everyone else pays for it.

Not Clean Clean

Barclays was also accused of “aiding attempts by other banks to manipulate” interest rates, further underscoring the clubby nature of Wall Street. In some cases, bank employees coordinated with former colleagues who worked at rival firms as a way to manipulate the rates, according to the regulatory documents.

Ben Protess & Mark Scott: Barclays CEO Resigns as Bank Frames a Defense

Seriously, it’s RICO time.

Anything for you, money

AT&T Inc. got more than $16 million from the U.S. government to offer a calling service for the deaf that the company knew was being used by Nigerian fraudsters to steal from American merchants, the Justice Department said.

AT&T Accused of Billing U.S. for Nigerian Fraud Calls

JPMorgan Chase & Co. took procedural shortcuts and used faulty account records in suing tens of thousands of delinquent credit card borrowers for at least two years, current and former employees say.

OCC Probing JPMorgan Chase Credit Card Collections