How the British trader overtook the market with Financial Times data and earned more than $ 70 million
In our blog on Geektimes, we often write about how traders try to use modern information dissemination tools in order to get ahead of competitors. An example is the story of a financier who was able to earn $ 2.4 million in 28 minutes using one tweet, another trader fell for manipulating the market with fake Twitter accounts of analytical companies.
British trader Iraj Parvizi went even further and learned to overtake the market with the help of data obtained from journalists of the country's largest financial publications, such as the Financial Times and the Daily Mail. He told about how he managed to do this at the court hearing.
Mad player
Among traders, the 50-year-old Parvizi earned himself the nickname “Mad Player” - he was ready to trade in absolutely any shares. In 2000, the value of its net assets reached 50-70 million pounds sterling ($ 70-98 million) - he himself called himself "the king of penny stocks". Now Parvizi is accused in one of the largest and most complicated cases of insider trading in the entire history of the UK judicial system.
According to the British Financial Conduct Authority for Financial Markets (FCA), former managing director of Deutsche Bank AG, Martin Dodgson and former stock broker Panmure Gordon & Co. Andrew Harrison passed on valuable information that could affect the level of quotations to accountant Andrew Hindu, who supplied Parvizi and trader Benjamin Anderson with it. Parvizi on this charge faces up to 7 years in prison.
Iraj Parvizi
At the court hearing, Parvizi told the jury how he had received information. His method meant talking to journalists, of which he understood what they were going to write the next article about.
Everyone needs information
"Any conversation with a journalist gives something," - said the trader. According to him, if the journalist mentions the assumption that the private equity fund is interested in a certain company, then “you can be sure that an article will be published on this topic tomorrow.”
Parvizi called his acquaintances in British newspapers and tried to understand what they were working on - the journalists did not know that they were being used, thinking that their “source” was pouring information about the market situation to them. Therefore, they did not say anything directly, the trader guessed about the topic of their future work on certain fragments of phrases and questions that they asked him.
“It works like this: I need information, they need information,” Parvizi said. “If I buy stocks today, and tomorrow the Daily Mail writes something, they can jump by 2–5%.”
Among his closest sources, Parvizi named, in particular, Financial Times journalists Paul Murphy and Neil Hume, and Jeff Foster, a Daily Mail reporter.
The Financial Times spokesperson Christina Eriksson denied accusations that the journalist contributed to insider trading. She stressed that the journalists of the publication do not offer "tips" to sources or players in the market, since such activities are illegal.
The representative of The Daily Mail Oliver Lloyd, in turn, said that he considers it unethical to comment on the statements of Parvizi during the trial.
The story of Iraj Parvizi is far from the first in a series of major scandals related to insider trading. Earlier, UBS trader Tom Heys was accused of fraud with a LIBOR rate, which the media called the “biggest financial conspiracy” (we wrote about this case here and here ). But not all cases of such manipulations can quickly be revealed - we recently wrote about cases when mysterious traders organized collapses in stock markets around the world.