Professional and amateur market abuse

"HFT algos are manipulating prices seconds before key economic data is released. The [couple of seconds before] period is ideal because it provides the algos with a unique opportunity to move a market subtly yet very much predictably — at the same time as sparking a series of trading chain reactions, which can be easily navigated and front-run pre-anticipated in a variety of related options, ETFs and equities. As an HFT there is a distinct advantage to cause volatility. " (FT Alphaville)

Compare and contrast this market abuse by professionals with market abuse by amateurs.

"In May the FSA fined a businessman £1m for 'market abuse'. Mr Kahn was found to have deliberately ramped the share price of Global Brands Licensing, a PLUS market-listed company. Over a one-month period in 2010 Mr Kahn caused the share price to rise from 2p to 5.25p by repeatedly placing orders under other people's names." (Telegraph)

And this one...

In June a day trader who found a way of "exploiting weaknesses" in the trading platform of Michael Spencer, the City grandee and former Conservative Party treasurer, has been hit with a £700,000 fine. The FSA found his actions amounted to "deliberate and repeated" market manipulation. "This came as a complete shock to me," he said. "I never realised my actions amounted to market abuse. I developed a system that was very profitable and was aimed at a exploiting a weakness in spread-betters' trading platforms." He made money by placing small orders for shares on the open market at times when trading was slow. These would typically be at the bottom range of a company's bid-offer spread.

With this price lodged at the London Stock Exchange he would then take advantage of spread-betting firm's price-matching promises to buy shares at the reduced price. When he came to sell the shares he would operate the process in reverse. He would set a high price by placing an order for a small number of shares on the open market closing his position with the spread betting firm immediately afterwards. The FSA said it "views market manipulation extremely seriously”. (Telegraph)

The FSA are cracking down on manipulation of share prices for profit - but not when conducted by an investment bank?