High frequency trading firm fined $850,000 for computer errors

28 November 2011

A high frequency trading firm has been fined $850,000 for three separate computer errors which disrupted trading on the futures market.

Infinium Capital Management’s trading programs are believed to have malfunctioned on 7 October 2009 and later that month on 28 October - both errors led to uncontrolled selling of futures on the Chicago Mercantile Exchange (CME).

In February the following year an algorithm malfunctioned again which led to the selling of crude oil futures - the incidents led to the CME charging Infinium with committing “acts detrimental” to the market place and for improper identification of the trades.

Greg Eickbush, Infinium's chief operating officer, told Reuters that the fine could be the largest penalty handed out for a non-fraud error.

“I think that just represents the times and the current environment more than anything else. We didn't want to be on the precedent-setting end of any fines, however we do understand the importance of keeping the marketplace as transparent and as trustworthy as possible,” he told the news provider.

Infinium neither admitted nor denied the rule breaking.

By Jim Ottewill

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development