For many people, even in the current lull, high-frequency trading based on abstruse mathematical model sounds like a prescription for fortune.

While making money is never that easy, there's a sucker born every minute when it comes to wanting to cash in on the latest and greatest on Wall Street. That was the ruse perpetrated by Andrey Hicks, who put together a winning, albeit fraudulent, shtick. His victims were lured to his Locust Offshore Fund by his Harvard pedigree (though he dropped out twice, according to Barron's),  his ostensible facility with algorithmic trading and the aura he projected as a science-type who had the market figured out. A whiz kid.

He falsely marketed that he got a Ph.D. from the Harvard School of Engineering and Applied Sciences in 2007. Hicks also "claimed to have developed a formula that allowed high-speed trading robots to generate an annual return of 78.59 percent."

People really want to believe that stuff. The SEC says an investor who was seated next to him on a flight was so taken he wired him $100,000 the following month. Nine others were said to invest between $83,000 and $500,000. All that money went directly in his personal bank accounts.

In some ways, this reflects the extent to which algorithmic trading has captured the public imagination. I am not surprised by this fraud. In fact, I am surprised we haven't seen more people attempt it.

For more:
- here's the Barron's article

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