Market Manipulation and Market Microstructure

Cornerstone Research conducts detailed analyses in a range of trading practice and market manipulation matters.

Our external and internal experts are equipped with academic expertise and practical experience across a range of markets and large datasets. This, together with our staff’s deep knowledge of economics and finance, enables us to support experts and clients with a robust, multidisciplinary approach. We work with clients to compile relevant data and determine the appropriate analyses for each matter, applying market microstructure theories, advanced modeling techniques, and econometric methods. We bring substantial experience handling big data, complex source code, and forensic analysis of data and documents. Using large public datasets and proprietary company information, we offer insightful and effective analyses. We combine technical expertise with a deep knowledge of litigation and regulatory issues.

Market Manipulation Capabilities

Benchmark Manipulation: Trading Misconduct

We evaluate allegations of trading behavior allegedly impacting or attempting to impact prices of different products and contracts at market closing or fixing windows.

Benchmark Manipulation: Misreporting to Price Reporting Agencies

We evaluate trading data and positions to assess allegations of strategic misreporting of trade data to PRAs in order to benefit market positions.

Spoofing and Layering

Cornerstone Research conducts screening analysis of large proprietary financial datasets to identify potential problematic conduct, assess the scope of conduct in question, and analyze trading patterns.

Corners and Squeezes

Our staff and experts have utilized transaction-level data to analyze trading in derivatives and their respective underlying products.

Front-Running and Pre-Hedging

Cornerstone Research conducts in-depth analysis of complex financial instruments, trading and hedging activities, and electronic communications and audio records to identify potential problematic conduct and assess market impact.

Wash, Round-Trip, and Prearranged Trading

We analyze trading and order data to evaluate allegations of wash trading and prearranged trading in various financial markets.

Market Microstructure Capabilities

High-Frequency Trading (HFT)

We have experience working on various aspects of high-frequency and low-latency trading, including assessing trading strategies, trading algorithms, and the impact of HFT trading on market dynamics. We have also examined broker-dealers’ and trading platforms’ order handling algorithms in the HFT environment.

Other Market Microstructure Topics

We have experience with order handling, rules involving price quoting, clearing and settlement, uncovered short sales, best execution, markups, and trade reporting.