Authors: Mark Russinovich
The primary problem associated with HFTs is that they make money if the stock goes up, or if it goes down. The consequence is that they have no vested interest in maintaining value. The algos HFTs use tend to act in unison with slight variations as each seeks an advantage. If the HFT algos decide Toptical is going up, they’ll join in the ride and from their participation we may witness the largest public offering in world history. But if the algos decide the stock is tanking the HFTs will pile on and drive the stock into oblivion. Either, or neither, could happen today.
What experts recall is that a trade of just over $4 billion when the average volume was $200 billion on a single day created the infamous Flash Crash. They claim that the measures taken since then will not prevent a repeat of it. We can expect more than one trade today to exceed $4 billion dollars. The consequence is that what is at stake isn’t whether or not people make money. It is if Wall Street can sustain the shock of another Flash Crash incident. And if it cannot, then the world financial system could very well totter on the brink of collapse. All it will take is a single push to shove it into the abyss.
© Copyright Financial News Analysis, LLC
75
WALL STREET
NEW YORK CITY
12:07
A.M.
Daryl noted how clean the air was outside on the street after the stuffy, closed space of the Exchange with all its electrical devices. There was a light, cool breeze, heavy with the smell of the Atlantic sweeping the Wall Street canyon, and she drew her suit jacket close in front of her.
“The coffee shop is just there,” Iyers said with his usual smile. “It’s not bad. The best part is that it’s open 24/7.”
Daryl had noticed it before. Iyers took the outside position as they walked toward it.
This was a situation she was uncomfortable with, but she didn’t know how else to deal with it. Iyers was part of the operation, though she had no reason to think he knew that she knew. Still, she couldn’t help but be on edge. She’d made good progress with the logs and copied the suspect ones to a thumb drive. With the two in-house names and the incriminating information she’d collected leading to Brazil she was satisfied she had enough to get the SEC to back off Jeff and Frank and take another look at what was really going on.
What she needed to do now was block the rogue code so it wouldn’t be operational when the IPO launched. The more she’d seen of the operation, the more it frightened her, and the speed with which changes had been made to the code in recent days suggested to her a lack of proper care. High-frequency traders, even the Exchange itself, took months to carefully craft every bit of code they inserted into the trading engines, yet glitches still happened. How much damage would a group of freebooters, their common sense dulled by greed, cause with sloppy code?
Iyers was chatting, and she feigned attention, glancing up at him from time to time, as if this were a first date. He was an attractive man, no doubt about it, but she’d seen enough of him to realize there was a forced congeniality in his interactions. There had been moments when it struck her that he was acting.
How different Jeff was. If anything, when they’d been together she found his lack of spontaneity almost too much. Looking back on it, she realized how refreshingly honest he was. Even when he was ending their intimate relationship, he’d been unable to be anything but candid. She’d taken offense at that, had nursed her anger for a wasted year. Now she understood how rare it was. If she ever got a second chance, she told herself, she’d embrace his candor, not see it as something to deal with.
As they passed an alleyway just short of the coffee shop, Iyers looked up the street, then down. Without warning, he bodychecked her off the sidewalk into the gaping blackness. Stunned, Daryl staggered, recovered her balance, then opened her mouth to scream. Iyers struck her on the side of her face with his fist, like a prizefighter delivering a knockout blow. Daryl fell, her head swimming as she struggled to remain conscious.
Iyers looked quickly back toward the sidewalk for any sign of alarm. Seeing none he seized Daryl’s feet and dragged her deeper into the dark, pulling her beyond two overloaded Dumpsters. Satisfied they could no longer be seen, he stopped and stood astride the prostate woman like a conqueror, breathing heavily.
From the ambient light and dim glimmers from windows facing the alley he could see her prostrate form. Her skirt had been pulled up above her waist revealing her panties and legs, looking pale and vulnerable. He was suddenly aroused to a fever pitch.
He reached down and jerked her out of her jacket, her body twisting side to side as he pulled it off with force. Next he tore at her white blouse, angry when it refused to give at once, tearing at it harder, finally ripping it apart to reveal her bra.
Iyers had never raped anyone before, though it was one of his recurring fantasies. Until now, he’d always taken his victims drunk or drugged, sometimes dazed from his rough handling. They were always unwilling, or at the least in no position to be willing. Still, he’d had to be careful they’d not report him and that caution had always limited what he could do.
But not tonight, not now. He could do what he wanted before killing her. It was that realization that excited him. He’d be gone in a few days after all. There was no reason he’d be suspected, no reason to hold back.
Daryl moaned and Iyers slapped her. Then he knelt beside her and began clawing at her panties.
76
GRUPO TÉCNICO
RUA ADOLFO MOTA
GRANDE TIJUCA
RIO DE JANEIRO, BRAZIL
12:08
A.M.
As they approached the parking area in front of the wide stairs leading to the French doors, César gestured for the men to stop. He stood examining what he saw. After a moment, he turned and whispered to Bandeira. “
Chefe,
wait here while we approach. It doesn’t look right. There’s no guard on the grounds and I can see no one at the desk.”
“My son is in there,” Bandeira said in a nearly normal voice so all could hear. “Nothing must happen to him.”
César gestured for the other two to follow, then moved cautiously toward the building. Bandeira held back, then, unwilling to wait, moved with them, his weapon at the ready.
* * *
Carl was watching the outside approach. “Trouble,” he said. “We’ve got visitors, and they’re moving like a combat patrol, weapons ready.”
“Shit,” Oscar said as he took out his automatic pistol and moved to position.
“Four armed men approaching cautiously, Frank,” Carl said into his mic. “They aren’t sure about us yet, but they soon will be.”
“I’ll be right down.” Frank gave Pedro a “stay right there” look, then moved to the door as he pulled out his weapon. “We’ve got company. I’m going down. You need to get in here and keep an eye on this one. He’s our ace in the hole. And keep your head down.”
Jeff had just pocketed Pedro’s hard drive and was about to move into the outer office to start on the computers there. He came into the office as Frank was running down the stairs. He looked at Pedro. “Don’t move.”
Pedro nodded. His father was back and with him was César and two bodyguards, hard men he’d often seen over the years. These Americans were in serious trouble. This whole raid had struck him as lunacy. What did they expect to gain from it? No one here was going to talk. He certainly wasn’t. And the way things were going, they’d be dead in a few minutes.
In the short time he’d been seated, Pedro had steadily worked at the plastic strip binding his wrists. It still held him fast, and he doubted he could free his hands, but he had to try.
* * *
César halted the men once again. He still could not see either of the guards who should have been in plain sight.
“Spread out. I think we have trouble. Be careful of your targets,” he ordered.
“Anyone who harms my son dies, along with his family,” Bandeira hissed.
* * *
Frank, Oscar, and Carl spread themselves about the ground floor, taking up firing positions they’d instinctively selected when entering the building. Each had cover and together they provided a lethal triangulated firing zone anyone foolish enough to use the front entrance would find unforgiving.
Frank spoke into his mic. “Think we can bargain using the son?”
“Maybe but I wouldn’t bet on it right now,” Oscar answered. “They don’t look in the talking mood.”
“One of you know where the light switches are?” Frank asked.
“Behind Oscar,” Carl said.
“All right. Once we know they mean to fight kill the lights. Until then, let’s see if they want to talk.”
They didn’t have long to wait and no chance to communicate.
Sergio came through the entrance first, kicking the doors open, moving fast and low, followed immediately by Paulinho with his heavier weapon, one darting left, the other right. Oscar reached for the switches. Paulinho fired from his position against the front wall, striking Oscar in the stomach just as he slapped the lights off. He fell to the floor, clutched at himself, an excruciating pain rendering him all but immobile.
Carl returned fire, aiming at the flash point of the assault rifle. But Paulinho had already moved to the side. Sergio fired back at Carl and was struck in the chest by three bullets from Frank’s handgun.
“Sergio!” Paulinho called out. “Sergio! Are you all right?”
César was now inside, moving to his right toward Paulinho. Behind him he realized Bandeira had come in as well. “Over here,
Chefe
!” he shouted. If something happened to him, César knew his days were numbered.
Paulinho opened up with a full auto blast, bullets striking the wall behind Frank, pictures shattering and falling, plaster flying from the walls.
“Pare! Você está louco? Meu filho!”
Stop! Are you crazy? My son! Bandeira shouted.
“Paulinho, single fire. And careful!” César ordered. Sergio and Paulinho had been close friends for years.
César saw flickering light behind him. A fire had started on a curtain, lit by a sparking wire exposed by the bullet holes in the wall behind it. César turned to see if he could risk putting it out but decided against it. The flames would make him a target.
“Oscar,” Frank said into the mic. “Are you all right?”
“It’s bad,” Oscar groaned.
“Carl?”
“I’m clear,” came the answer.
A lull had come to the firefight. The only sound was the snapping flames of the growing fire.
Upstairs Jeff clutched the revolver. He’d been startled when the lights went out below, but the reason had come at once when the gunshots began. He went to the doorway at the top of the stairs and turned out the lights upstairs as well. Should he go and help?
Behind him, Pedro had given up on his hands, but he had to do something. He was certain that his father was down there, risking his life to save him. In the darkness he could just make out the tall American standing in the doorway, not far from the top of the stairs. Impulsively, he shot to his feet and charged him.
Jeff felt the blow from behind and was shoved through the doorway toward the top of the stairs. He twisted around fumbling to grab the young man who was grunting as he struggled and pushed him. Jeff clung to the revolver in desperation, trying to use both hands against the young man but Pedro was strong, stronger than he’d looked. Before Jeff had control, the two of them were on the landing, then tumbling down the stairs.
The fire had spread across the front wall. It licked at the office furniture, inching along the carpet and casting the room in a fiery glow. Paulinho had moved to his left, checked Sergio, and found him dead. Filled with rage he lay prone and searched for someone to kill.
“Pick your targets, Carl,” Frank said into his mic. “Oscar’s hurt. We need to make short work of this.”
Carl used an old dodge. He felt around on the floor, found an object that felt like a heavy ashtray that had fallen, then tossed it away from him. Paulinho fired at the sound, Carl instantly returning fire. Paulinho grunted from the impact of the bullets, slumped flat onto the floor, and was dead within a minute.
César replied to Carl’s shots with controlled semiautomatic fire but Carl had already moved. Frank fired on César, who twisted away as a bullet burned its way through his left bicep. “
Merda
,” he cursed under his breath as he rolled onto his back.
Looking behind him as he tried to determine how bad the wound was, César saw that the room behind him was now engulfed in flames, smoke beginning to spread everywhere. There was no turning back, but then, that had never been an option.
77
WALL STREET
NEW YORK CITY
12:11
A.M.
Consciousness came to Daryl like a bad dream. Something weighty had struck her. She had a vague memory of being pulled across rough ground, worried as her dress rode up to her waist. Then something was hitting her, grabbing at her. The sensations were remote, though, almost as if they were happening to someone else. She felt no pain, no discomfort of any kind. It was as if she’d lost all sense of feeling, as if her body had turned numb.
Then suddenly she was awake, the cocoon of silence that had engulfed her filled with sound. The rough asphalt of the alley, the debris under her, was harsh against her exposed skin. And her face hurt as if she had a terrible toothache. Above was more sound, moaning, and she felt her body being pushed back and forth.
Daryl opened her eyes and saw at first just darkness interspersed with faint light, foggy and undistinguished. A form hovered above her, near, weaving back and forth, muttering to itself, the words slurred, impossible to make out.
Richard. The name shot into her memory. I’m being murdered.
The realization came as a shock. Then, feeling her panties pulled from off her feet came the other realization. I’m being raped!