How exactly would this fraud work? Most HFT firms only trade their own capital and distribute gains internally, there’s no one to defraud. Also it’s been going on a lot longer than a decade.
Market coercion, regulatory capture, negligence, or any other plain old market manipulation like pump and dump or insider trading or bear raiding, etc.
Enron straight up lied to regulators, many of their employees were also plain negligent. HFTs will probably find their own flavor of fraud given a few more years, if they haven't already.
> HFTs will probably find their own flavor of fraud given a few more years, if they haven't already.
This is what psychics call a "cold reading" - a statement that is bound to be true eventually! At some point in the future HFTs will "find" (?) something approximating fraud. That almost can't not be true. But I don't see how it relates to your statement that Jane Street's reported profits are fraudulent.
Sure, that statement is a bit of a non sequitur. Here's one that isn't:
Highly profitable, speculative, and complicated US financial firms have consistently grown to threaten the stability of US financial systems before collapsing. As such, these types of firms have a high burden of proof for legitimacy. If that hasn't been met, betting on fraudulence is pretty safe given historical context.
Fair. I disagree with "consistent". Some highly profitable, speculative, and complicated US financial firms have done this, but others haven't. E.g. insurance firms.
