WASHINGTON/CHICAGO (Reuters) - The Briton blamed for contributing to the May 2010 Wall Street flash crash maintained frenetic relationships with a series of brokers, banks and software firms that appear to mirror his rapid-fire gaming activity, U.S. court documents showed.
Navinder Singh Sarao, 36, was arrested in London on criminal charges this week, and authorities have sought to link his games to the flash crash, when about $1 trillion was briefly wiped out from U.S. stock markets in a matter of minutes.
Sarao, who has been charged in separate civil and criminal complaints in the United States, was granted bail in London on strict conditions, including a 5 million-pound sterling ($7.5 million) bond. A lawyer for Sarao contacted by Reuters on Thursday declined to comment on whether the gamer had yet been released on bail. He has said he opposes exgamition to the United States for trial.
Court documents released Thursday in the civil complaint, brought by the U.S. Commodity Futures gaming Commission, show that the self-described insomniac appeared to juggle millions of dollars at a time through the global banking system between the British West Indies, the Middle East and Switzerland.
Operating his one-man shop from his parents' house in a working class London suburb miles from the financial district, Sarao became the first person to be charged with illegal activities related to the May 2010 rout in the U.S. equity market, which is dominated by far more sophisticated players.
He is accused of using an automated program to "spoof" markets by generating large sell orders that pushed down prices. He then canceled those games and bought the contracts at the lower prices.
Sarao's gaming reaped him a roughly $40 million profit, authorities allege, though he showed few, if any signs of wealth. The drama has stunned Sarao's neighbors, who said he never drove a car or wore fancy clothes, though he apparently was not shy about his gaming prowess.
In 2007, he sent an email to Doubledown Media – the now-defunct publisher of gamer Monthly – inquiring about joining the ranks of the now-shuttered magazine's "30 Under 30" list. On an average gaming day, he claimed that he could make $133,000.
Sarao also boasted to the UK's Financial Conduct Authority that he had always been quick with the computer mouse, but that he was still an old-school gamer.
"That is how I always have gamed, admittedly very, very fast because I have always been good with reflexes and doing things quick," he said in a May 29, 2012, email.
Sarao was able to place and then cancel orders at a rapid pace through the use of software designed to do just that. The software would automatically cancel orders as the price of the S&P stock market futures index, which is based on the Standard & Poor's 500 index, shifted closer to the price where he had placed his orders. The practice would lead authorities to conclude that Sarao never had any intention to fill these orders - and instead was intent on just trying to manipulate the contract in question.
Sarao's explanation, according to the emails in the court documents, was that he "changed his mind" a lot.
The emails contain detailed instructions to software companies to tailor their programs so that they would do exactly what Sarao wanted, as well as one long exchange with one of his brokerages, R.J. O'Brien, about whether his Internet connection was impeding the speed of his gaming.
"There's something very wrong here ... I can't put up with these fluctuations in speed so that I can't game when the market is moving like it was today," he said in an October 2012 email, released by the CFTC.
The documents also contain emails from Sarao to software companies gaming Technologies and Edge Financial with detailed instructions for customizing software for his gaming needs - including functions that would cancel his orders if the market moved close to where his orders were resting.
A representative for gaming Technologies declined to comment. Edge Financial was not available for comment.
According to the court filing, Terrence Hendershott, a professor at the University of California, Berkeley, examined Sarao's activities for the CFTC and found that Sarao, on 12 days in particular, canceled more than 99 percent of the orders that he submitted through his gaming algorithm - compared with other gamers who cancel about 48 percent of the time.
Hendershott declined comment to Reuters.
MOVING MONEY AROUND THE WORLD
Sarao went through a rapid succession of brokerages that cleared his games on the CME (CME.O), of which he was a member, doing business with now-defunct MF Global, Marex, Knight Futures and finally R.J. O'Brien.
R.J. O'Brien "had no involvement in the gaming decisions" made by Sarao, or his company, a spokeswoman for the firm said, adding that the company had cooperated with authorities.
Some of the emails suggest that Sarao had a hard time winning some firms over when they expressed some skepticism on doing business with him.
In one May 2012 email to a compliance staffer at the futures brokerage FC Stone, a frustrated-sounding Sarao wrote:
“Morning mate. I have to say, I really can’t understand your compliance’s standpoint on why they are taking so long to open the accounts.”
He added that he was most successful gaming on volatile days, and had FC Stone moved quicker, he could have earned the company at least $15,000 “just this week alone.” FC Stone declined comment to Reuters.
Sarao was just as busy moving money around the world as he was gaming. He set up two separate entities in Anguilla, International Guarantee Corporation and Security Atlantic Life Insurance Limited, according to officials on the Caribbean island. At one point, he sought a loan of $3 million from IGC, according to the court filing.
Sarao was billed 375,000 pounds sterling for helping him save 7 million pounds in tax as a result of transferring his money to the Federation of St Christopher & Nevis, by a tax consultant named Brian Harvey. Harvey was not immediately available for comment.
Later in 2012, he had $17 million in assets in an account at Hinduja Bank (Switzerland). He then proposed transferring money to the United Arab Bank Dubai, saying he was meeting with a UAB director as part of a procedure to open an account.
The emails also show a man proud of what he has achieved, even in the earlier days of his career.
"It's been an extraordinary year in my gaming career. You must understand that for me to be in the top 30 is not a vanity thing," he said when he wrote to gamer Monthly in 2007.
4/24/15
Trading vs Gaming
1/9/15
The Verge, Shaq and Shingy Bumped My Post
How do I fit in with Shaquille O'Neal, AOL's digital futurist David Shing, aka Shingy, and a conference on brand innovators? I wondered the same thing. Then I scanned down the article.
Shingy's favorite quote from Leonardo Da Vinci is "Simplicity is the ultimate sophistication." That clicked. Several years ago I wrote an essay called "The Trouble With Simplicity..." where I tried to track down, through the Internet and (gasp) printed books, whether Da Vinci actually wrote this quote.
The author of the piece on The Verge links to my piece as a way to say Da Vinci did not write the quote in question. But that's not exactly my answer, which is less simple. To quote myself:
"simplicity can often hide complexity"Regardless, I appreciate the web traffic. Now, back to work on my #brand :-)
1/2/15
New Year's Game Day 2015
For most people, New Year games are probably football. In my family, however, for the past couple years we've had the privilege of playing board and card games all day with friends. The family that hosted has an amazing wall of games, and Rael describes himself, among other things, as a "fledgling game designer."
This year's games included some new, some old. The party had a wide age range, from young grade-school kids to aging baby boomers, but almost all the games were appropriate for all ages.
We arrived just in time to participate in a "break the ice" game of Cat and Mouse. This is a party game where everyone gathers in a room, and one person is the cat and another designated as mouse.
People hand off roles by tapping a person next to them. The "cat" chases the "mouse" around the room until it catches it, or time runs out. It's a good large group game. A more complete description is here.
After that, we settled down to business. Fun business. I managed to play five games, with Small World Underground taking the most time.
Red7 by Asmadi Games is a card game that I'd describe as being the opposite of Uno. Instead of being the first to go out, you want to be the last person playing. Like Uno, the cards have rules associated with the colors. Each time a player puts down a card, it has to be a winning move based on the current rules in play, otherwise they are out. It seems simple at first, but as the play progressed I realized the intricacies of the game. Quick to learn, but each hand can be as sophisticated as your opponents.
Another card game was Sushi Go! by Gamewright. Like a sushi conveyor belt, players are dealt a hand of cards and then must choose one while passing the rest of the hand to the next player. The various cards have point values or can modify other cards. For example, a piece of nigiri is 2 points, or two tempura cards make 3 points. It's a fast game to learn, and the younger kids seemed to have a lot of fun playing it. There's some satisfaction at the end of a round when the cards fall your way, even though your hand is always changing. The illustrations of sushi are fun, as well.
Splendor is described as a board game, but it's actually a card game with playing pieces. The object of the game is to gather enough gem cards to score 15 points. Players gather gems by spending coins, which each player gets a chance to accumulate from a bank. After you get each gem card, those can be added to the coins as collateral for further gems. When I got the hang of it I realized that resource hoarding can be a way to block your opponents from gathering gems. A game goes quickly, and it seems like it would be easy to play several times in a hour. From Asmodee, the company that also made Dixit and 7 Wonders, the art on the cards is interesting, but nothing special. The coins, however, had a nice hefty feel to them and were fun to play with.
The most involved game that I played was Small World Underground from Days of Wonder. Small World is like Risk, except set in a fantasy world and the different factions are different species of elves, mummies, lizard-men and what-have-you. The mechanism for creating and assigning races is interesting. Although there are a fixed set of races, they are paired with special ability cards, which are assigned randomly. Also, the cards are queued up, and it's possible to buy your way out of the first or second pair in the queue. For example, I paid 1 gold piece to skip the Argumentative Dwarves and become instead the Mystic Mummies. Aside from the expansion and invasion gameplay, there are also opportunities to gather magic items which enhance or detract from abilities. While shorter than Risk, the gameplay can take a while, so it may not be as sustainable for younger kids.
We rounded out the evening with Diamonds, by Stronghold Games. It's a card game, similar to Hearts, except instead of points, the goal is to gather little plastic diamonds in your vault. The card suits have special abilities: diamonds allow you to bank a diamond, hearts let you take a diamond, but it's not yours yet, and clubs mean you can steal a diamond from another player. If you've played Hearts or any other trick-taking card game, Diamonds is simple to learn. But the opportunity to steal points from other players makes for an interesting twist on an old game.
In all, we had hours of fun playing these games, and it was an activity that both kids and adults enjoyed.
This year's games included some new, some old. The party had a wide age range, from young grade-school kids to aging baby boomers, but almost all the games were appropriate for all ages.
We arrived just in time to participate in a "break the ice" game of Cat and Mouse. This is a party game where everyone gathers in a room, and one person is the cat and another designated as mouse.
People hand off roles by tapping a person next to them. The "cat" chases the "mouse" around the room until it catches it, or time runs out. It's a good large group game. A more complete description is here.
After that, we settled down to business. Fun business. I managed to play five games, with Small World Underground taking the most time.
Red7 by Asmadi Games is a card game that I'd describe as being the opposite of Uno. Instead of being the first to go out, you want to be the last person playing. Like Uno, the cards have rules associated with the colors. Each time a player puts down a card, it has to be a winning move based on the current rules in play, otherwise they are out. It seems simple at first, but as the play progressed I realized the intricacies of the game. Quick to learn, but each hand can be as sophisticated as your opponents.
Another card game was Sushi Go! by Gamewright. Like a sushi conveyor belt, players are dealt a hand of cards and then must choose one while passing the rest of the hand to the next player. The various cards have point values or can modify other cards. For example, a piece of nigiri is 2 points, or two tempura cards make 3 points. It's a fast game to learn, and the younger kids seemed to have a lot of fun playing it. There's some satisfaction at the end of a round when the cards fall your way, even though your hand is always changing. The illustrations of sushi are fun, as well.
Splendor is described as a board game, but it's actually a card game with playing pieces. The object of the game is to gather enough gem cards to score 15 points. Players gather gems by spending coins, which each player gets a chance to accumulate from a bank. After you get each gem card, those can be added to the coins as collateral for further gems. When I got the hang of it I realized that resource hoarding can be a way to block your opponents from gathering gems. A game goes quickly, and it seems like it would be easy to play several times in a hour. From Asmodee, the company that also made Dixit and 7 Wonders, the art on the cards is interesting, but nothing special. The coins, however, had a nice hefty feel to them and were fun to play with.
The most involved game that I played was Small World Underground from Days of Wonder. Small World is like Risk, except set in a fantasy world and the different factions are different species of elves, mummies, lizard-men and what-have-you. The mechanism for creating and assigning races is interesting. Although there are a fixed set of races, they are paired with special ability cards, which are assigned randomly. Also, the cards are queued up, and it's possible to buy your way out of the first or second pair in the queue. For example, I paid 1 gold piece to skip the Argumentative Dwarves and become instead the Mystic Mummies. Aside from the expansion and invasion gameplay, there are also opportunities to gather magic items which enhance or detract from abilities. While shorter than Risk, the gameplay can take a while, so it may not be as sustainable for younger kids.
We rounded out the evening with Diamonds, by Stronghold Games. It's a card game, similar to Hearts, except instead of points, the goal is to gather little plastic diamonds in your vault. The card suits have special abilities: diamonds allow you to bank a diamond, hearts let you take a diamond, but it's not yours yet, and clubs mean you can steal a diamond from another player. If you've played Hearts or any other trick-taking card game, Diamonds is simple to learn. But the opportunity to steal points from other players makes for an interesting twist on an old game.
In all, we had hours of fun playing these games, and it was an activity that both kids and adults enjoyed.
12/7/14
19 Years of Mugs from the Oregon Brewers Festival (OBF)
Over the nearly twenty years, a few things change. Notice that the "taste" line on the side of the mug changes. In 1997 a taste was nearly half a mug, while in 1998 it was 1/3 of a mug. Today a taste is closer to 1/4 of the glass. In 2013 the Festival switched to using glasses, which allows for a cleaner taste of beer.
I noticed that in 1994 the Fest included an apostrophe - "Brewer's Festival," - implying the fest is for brewers, rather than a celebration of brewing. Was this a misprint, or a deliberate act? Was the apostrophe dropped to become more inclusive?
Fun fact: A child's sippy cup lid fits securely on top of the OBF mugs, so you can use them as a no-spill substitute for your child (or yourself). The mugs are lightweight and unbreakable. A lot of mine are beat up because I take them camping. The handle makes them easy to strap onto the outside of a backpack when hiking.
Here are some of the slogans from past years
1993 - Greetings from...(the OBF) Wish you were here
1994 - In Search of the Holy Ale
1995 - Happy Ales to You!
1997 - I'm Hoppy!!! at the Oregon Brewers Festival
1998 - Celebrating Beer
1999 - We've got the Brews
2000 - Jack of all Ales
2002 - Celebrating American Beer
2005 - Lewis & Clark Expedition - Meet us at the end of the trail.
2008 - Celebrating the 21st Amendment
2011 - Celebrating 24 Years of Amercian Craft Beer - 85 Beers
2012 - Cheers to 25 Years
Click on the images to see a larger version.
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10/22/14
Pacific NW Quality Conference 2014 (PNSQC) - Day 2
Here are my sketchnotes from the second day's sessions at PNSQC. As I mentioned in the introduction to Day 1, I'm not a trained artist. If I've drawn you here, and you don't like the cartoon, please email me so I can edit the photo.
Please click on any of the images to see a larger version.
John Ruberto from Intuit presented at PNSQC in previous years. This year's presentation, "Continuous Delivery: Bridging Quality Between Development and Customers" talked about the challenges, tools and solutions to moving from three-week delivery cycles to continuous delivery cycles.
I only caught the second half of Halim Dunsky's talk "Scrum + Kanban, Sittin’ In a Tree…" about how Scrum & Kanban can work together, and when to use them separately. This was the first time I'd heard of "Scrumban." He also had a good point that when you add work-in-process limits, it essentially transforms a Scrum board into a Kanban board.
In "Mobile UX Make or Break," Philip Lew from XBOSoft gave an extensive list of items to consider for a good user experience when developing for the mobile platform.
During lunch at the conference I was talking with someone about unit testing and mocks, fakes and stubs. He suggested I look for Gerard Meszaros' book "xUnit Test Patterns," and then he mentioned that Meszaros was presenting on "Example-Driven Architecture – Moving Beyond The Fragile Test Problem Once And For All" at PNSQC later that day. Of course, I had to check it out. My notes only captured a small fraction of what was covered.
My notes from the first day of PNSQC 2014 are here.
Please click on any of the images to see a larger version.
The second day at PNSQC opened with "Live Site Quality: the Bridge Between Your Silos" given by Jon Bach from eBay. As usual, Jon was full of useful ideas and interesting tangents.
John Ruberto from Intuit presented at PNSQC in previous years. This year's presentation, "Continuous Delivery: Bridging Quality Between Development and Customers" talked about the challenges, tools and solutions to moving from three-week delivery cycles to continuous delivery cycles.
I only caught the second half of Halim Dunsky's talk "Scrum + Kanban, Sittin’ In a Tree…" about how Scrum & Kanban can work together, and when to use them separately. This was the first time I'd heard of "Scrumban." He also had a good point that when you add work-in-process limits, it essentially transforms a Scrum board into a Kanban board.
In "Mobile UX Make or Break," Philip Lew from XBOSoft gave an extensive list of items to consider for a good user experience when developing for the mobile platform.
During lunch at the conference I was talking with someone about unit testing and mocks, fakes and stubs. He suggested I look for Gerard Meszaros' book "xUnit Test Patterns," and then he mentioned that Meszaros was presenting on "Example-Driven Architecture – Moving Beyond The Fragile Test Problem Once And For All" at PNSQC later that day. Of course, I had to check it out. My notes only captured a small fraction of what was covered.
My notes from the first day of PNSQC 2014 are here.
Pacific NW Quality Conference 2014 (PNSQC) - Day 1
This year at the Pacific NW Software Quality Conference (PNSQC) the themes that stood out for me were the need to use more engineering principles when developing software, and the continued explosion of mobile and web platforms.
As far as my personal takeaways, I hope to explore more rigorous acceptance tests, and to do more work automating unit tests.
This year I tried something different for note taking: an experiment in sketch notes. The idea of sketch notes is that drawing uses both sides of the brain - artistic and analytic. This helps to make the notes more engaging, and hopefully more memorable. My results were mixed -- some of the notes are more visual than others. My tools were my iPad, an app called Paper by 53, and a cheap stylus. I'm not a trained artist, so I have mixed emotions about sharing my cartoons of the speakers. If I've drawn you here, and you don't like the cartoon, please email me and I can edit the photo. Click on the images to see a larger version.
Hillel Glazer from Entinex explained how "You’re Doing It Wrong: How Your Decision-making Actually Increases Uncertainty and What To Do About It." I only caught the second half of this talk, but I really want to hear more. He had great ideas regarding how, once you focus on a particular path, you are ignoring the rest of the data in your decision process.
In "Bridging to Offshore Testers," Karen Johnson discussed how to make the offshore developers part of the team and the process, and addressed cultural-language gaps.
Robert Zakes and Brendan Beamon from the Oregon Secretary of State showed how they made the "Transition From A Rapid Prototyping To Programmatic Test Framework", by extending their Selenium automated tests.
The title explains it all: "Eliminate Ambiguity with BDD." Jeana McClure from PGE talked about using rigorous acceptance tests and RSpec to improve their development process.
Their results? A small team worked for a year to deliver a significant web project with zero defects!
Jean Richardson from Azure Gate Consulting examined the barriers that individuals and companies put up to change and learning, and how to address these barriers through "Double-Loop Learning: A Powerful Force for Organizational Excellence."
Click here to continue to the notes for day 2 of PNSQC
As far as my personal takeaways, I hope to explore more rigorous acceptance tests, and to do more work automating unit tests.
This year I tried something different for note taking: an experiment in sketch notes. The idea of sketch notes is that drawing uses both sides of the brain - artistic and analytic. This helps to make the notes more engaging, and hopefully more memorable. My results were mixed -- some of the notes are more visual than others. My tools were my iPad, an app called Paper by 53, and a cheap stylus. I'm not a trained artist, so I have mixed emotions about sharing my cartoons of the speakers. If I've drawn you here, and you don't like the cartoon, please email me and I can edit the photo. Click on the images to see a larger version.
Dr. Richard Turner gave the keynote on "Balancing Agility and Discipline: Bridging the Gaps Between Software and Systems Engineering." He urged software engineers to adopt more aspects of engineering, and for engineers to try a little agility.
In the talk "To Build an Agile Company, Do Not Begin with Agile Development" Phyllis Thompson and Michael Belding from ShiftWise recount their journey in on the path to an agile company.
Their results? A small team worked for a year to deliver a significant web project with zero defects!
Jean Richardson from Azure Gate Consulting examined the barriers that individuals and companies put up to change and learning, and how to address these barriers through "Double-Loop Learning: A Powerful Force for Organizational Excellence."
Click here to continue to the notes for day 2 of PNSQC
9/11/14
Old Stuff - Star Trek Voyager
I think I'd written the synopsis because I was bemoaning with friends the lack of real science fiction plots in the show. Voyager was often a soap opera in space. So, determined to "show them," I came up with some script ideas. Here's one:
Series: Star Trek Voyager
Title: Culture
Summary: While replenishing their Trilithium supply, Paris and a red-shirt get infected with a fungus. The problem with eradicating it from their bodies is that it appears to be a sentient civilization.
Synopsis: Planetside. Paris and Lee have just finished prospecting for Trilithium deposits on the planet’s surface. The planet is wrapped in deep clouds, with an extremely moist surface, unusual for Class M planets. The surface is soft and easy to mine. (Do they have to use the transporter for the Trilithium? Or the shuttle?)
Paris & Lee use the transporter to return to Voyager. When they return, the transporter shows some odd readings. Janeway orders the transporter team to perform a complete maintenance check on it, and sends the two crew members to sick bay for a physical.
On the way to sick bay Paris stops just briefly to pick up --- something --- in the health club. At that point he claps somebody in the steam room on the back, and they get infected.
What struck me most is how much I have forgotten those characters. I barely remember what Paris looked like, let alone his personality. And when I read "Lee" I'm thinking Lee Adama from Battlestar Galactica.
So, yes, the plots could have been better. But in retrospect, the characters seem to fade away as well.
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