Craig Pirrong shared his doubts about the CFTC’s ability to demonstrate that accused spoofer Navinder Sarao caused or even contributed to the Flash Crash. In his popular “Streetwise Professor” series, he states: “it is difficult to see how his [Sarao’s] activities would have caused prices to move systematically in one direction or the other as the government alleges… Attributing the Flash Crash to his activity is also highly problematic. It smacks of post hoc, ergo propter hoc reasoning” he stated.
Lofchie Comment: The CFTC’s assertions against Mr. Sarao overreach when they attempt to hold him responsible for the Flash Crash. Finding a scapegoat – even a scapegoat who happened to commit a crime – won’t fix the problems inherent in a flawed market structure.