Two Norwegian day traders have been handed suspended prison sentences for market manipulation after outwitting the automated trading system of a big US broker.
The two men worked out how the computerized system would react to certain trading patterns – allowing them to influence the price of low-volume stocks.This could become a more serious problem as trading systems become more automated, and I suspect that there are cases similar to this one that we never hear about.
One argument made by the defense is interesting: the defense lawyer admits that his clients misled the trading algorithm in order to make a profit, but weren't responsible for the actions of the computer. They're appealing the case.