The WSJ published another article scathing yesterday on a murky area of our broken market. This time Scott Patterson and Jenny Strasburg revealed more details from the Pipeline Trading scandal that broke last year. There are so many disturbing pieces of information in this article that it’s hard to know where to start, so we’ll just list a few:
– The Pipeline Trading affiliate, Milstream, was setup in 2004, with the goal of making sure orders got filled by first executing for its own account in the open market.
– Milstream was headed up by an employee named Gordon Henderson. Henderson was proud of the fact that every trader he hired had no prop trading experience and he trained them all.
– Henderson was quoted on the article as saying “I love nepotism” and he even hired his own step son who was paid $1.5 million per year from 2007-2009