In case you were wondering, this is an excellent way to determine whether the can’t-miss 30%-return-guaranteed trading strategy you’re being offered is probably a fraud.

To solicit and retain investors, Defendants represented that the Fund employed several profitable, sophisticated trading strategies involving highly liquid securities, including those that it was uniquely positioned to pursue because of its access to the Philadelphia Stock Exchange trading floor….

Ah, yes, unique and unprecedented access to highly sophisticated strategies playing out on the floor of the Philadelphia Stock Exchange, all masterminded from an office on the other side of I-76 from the West Conshohocken WaWa. In case you were wondering, this highly-placed individual is currently enjoying the hospitality of a county jail in Newark, N.J., after prosecutors discovered that one of those highly sophisticated strategies allegedly involved paying off $2 million in personal Amex bills, losing more than half of what she did invest, and inventing imaginary bank bonds and “securitized cryptocurrencies” to explain why she couldn’t fill redemption requests.

SEC v. Brenda A. Smith, et. al. [SEC]
Hedge fund CEO arrested at her Rittenhouse Square condo, charged in $63 million Ponzi scheme [Philadelphia Inquirer]
Philly hedge fund CEO jailed in N.J. pending bail hearing [Philadelphia Inquirer]

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Let's Get One Thing Straight: Ken Griffin Only Accuses People Of Attempting to Gain A Competitive Advantage By Gaining Access To Proprietary Trading Strategies-- He Does Not Get Accused!

Back in October, a former Citadel employee, Yihao “Ben” Pu, was arrested and charged with "stealing trade secrets" from Ken Griffin (by "copying company data onto a removable storage device," and then attempting to sell it to Teza Technologies AKA the firm a bunch of ex-Citadel guys tried to join in 2009 before being sued for doing so by Griffin, as well as the the shop a former Goldman programmer, Sergey Aleynikov, went to jail for after giving it proprietary GS code). Now, because apparently people just can't help themselves, KG has been forced to levy another allegation of theft against some former employees who he believes took a piece of his property when they left for high-frequency trading firm Jump Trading. Does Griffin have actual evidence that they swindled him? No, not exactly. But he's got a hunch, and that hunch is based on the fact that since 2005, when people from Citadel's "tactical trading group" started leaving for Jump, "some of the strategies" employed by the TTG "have become less profitable" and are "behaving in a way consistent with their having been copied by rivals." So what KG would like a court to do is force Jump to turn over "personnel documents, strategy and trading records, and source code," which will prove him right and the Citadel defectors to be the plunderers he knows they are.  Evidence in hand, Griffin will then sue Jump and everyone named Ken Griffin will go home happy. The only issue that needs to be worked out is Jump Trading's cooperation, which so far is proving difficult to obtain. In fact, the firm is being downright unhelpful and not only that? Its legal team has accused Griffy-boy of being the thief, or at least trying to be. That's right: the way JT sees it, Citadel's new profitable algorithm development system is a two-step process that goes something like this: Step 1: Steal successful algorithms from rival firm. Step 2: Use them. In its response filing, Jump said that Citadel had no evidence that the algorithms had become less profitable because of any of Jump's actions. It said that any of the hundreds of other algorithmic trading firms could be at fault. "The petition is nothing more than a transparent attempt by Citadel to obtain a competitive advantage by gaining access to Jump's proprietary and confidential trading strategies," Jump's motion said. Your move, KG. Citadel Accuses Jump Employees Of Stealing Secrets [Reuters]