To play Devil’s Advocate: How is this different from being a market maker? I am presuming that if the customer actually made money, these guys would pay them from their own pocket.
Or alternately, assuming zero or low enough transaction costs, if these guys just took the opposite position of their customers for each trade (also known as hedging) in the market, then wouldn't the net positions be exactly the same?
Basically, the crime here seems "technical" or some sort of "you lied to me", it's not that people actually got different returns than what their trades entailed.
Or alternately, assuming zero or low enough transaction costs, if these guys just took the opposite position of their customers for each trade (also known as hedging) in the market, then wouldn't the net positions be exactly the same?
Basically, the crime here seems "technical" or some sort of "you lied to me", it's not that people actually got different returns than what their trades entailed.