Rogue Code
Page 38
“I guess.”
“You don’t think so?” Molly looked crestfallen.
“I don’t know what I think,” Sam said. “Come on, Molly. I’ll buy you a drink. You’ve been putting in too much time here.”
“Really? At this hour?” Then Molly looked over her shoulder to see if anyone was watching, like a schoolgirl about to play hooky. “Okay!”
84
SAFE HOUSE
RIO DE JANEIRO, BRAZIL
7:07 P.M.
Jeff awoke lying on a bed. He ached across his entire body. The CIA doctor, if that’s what he was, had told him he’d be fine. He’d bandaged three or four places on Jeff’s forearms and neck where flames had touched him, then applied a greasy cream to other spots that gave off an angry glow. The hand Jeff had grabbed the doorknob with was wrapped in thick gauze. The doctor told Jeff to keep the cream applied and watch carefully for infection.
Frank was seated in front of the television in a worn armchair. He wasn’t wearing a shirt and his upper torso was also bandaged, especially around the right side. The television was off, and he was just ending a phone call with his wife.
“How’s Carol?” Jeff asked when Frank disconnected.
“Okay. She knew something was up but not what. She and the kids were glad to finally hear from me.”
“Did you tell her you got shot?”
Frank smiled wickedly. “I’m saving the best for last.”
“I thought the doc wanted you in a hospital,” Jeff said.
“He said something like that, but I told him I didn’t want to risk it even under an assumed name, so it was better to be here. He says I’ll be all right. He just doesn’t want any bleeding to start. I’m supposed to take it easy for a few days.”
“Any word on Oscar?”
“It was a near thing. He was in surgery for four hours, but they think he’s going to pull through.”
“I’m glad to hear that. I guess he’s in trouble, along with Carl.”
Frank stared at Jeff, then said, “You still amaze me at times, Jeff—you really do.”
“What do you mean?”
“We’re using a Company safe house, they got sophisticated surveillance equipment from the Company, a Company doctor is tending us—doesn’t any of that tell you something?”
“What are you saying?”
“Once Oscar and Carl knew the NL was involved, they called it in and got approval.”
“You’re telling me this was a CIA operation?”
“In the end, after a fashion. And the station chief is a very happy man right now. NL had been on the radar for a long time. Victor Bandeira, a really bad guy, is dead. So are his top enforcers, from what they hear. This was a good day for the good guys.”
Jeff absorbed the news. “I’m just glad everyone’s going to be okay.”
“That’s the bottom line. You should know that there’s also been some heat brought to bear on this SEC thing.” Frank had told him about his earlier conversation with Daryl and the evidence she’d uncovered. “We’re no longer suspects. The warrants have been quashed.” Just then, Frank’s phone rang. It was a Skype video call. Jeff heard Daryl’s voice when Frank answered. Frank held the phone out to him. “Someone wants to talk to you.”
Jeff took the phone and saw Daryl’s face on the screen. “Hi,” he said. She was wearing more makeup than usual, and he was sure he could detect scratches. He decided not to ask, not now.
“Hi to you. I see you’re still with us,” she said.
“Absolutely.”
“You’ll have to tell me all about it when you get back.”
“Sure thing. How are you?”
Daryl had not told Frank about Iyers or Campos. She’d save the explanation for when they were together. “Just fine. Tired. Did Frank tell you we stopped the rogue code?”
“He did earlier. But don’t you mean that you stopped it?”
“It was a team effort.”
“Thanks for helping. And it sounds like we can come home soon.”
“Good.” Daryl hesitated, then said, “Jeff, I’ve had some time to think about what happened with us. I want … I want to come back. Let’s do this right this time, okay?”
For a moment Jeff couldn’t speak. “Yes, let’s do it right.” He was almost choking when he said, “I’ll see you soon.”
Daryl smiled. “Can’t wait.”
WHITE HOUSE DISTRIBUTION ONLY
DO NOT DUPLICATE
MOST SECRET
MEMORANDUM
DATE:
October 15
FROM:
Seth Kaufman
Special U.S. Attorney
United States Attorney’s Office
Southern District of New York
Securities and Commodities Fraud Division
TO:
Eleanor Kaschnitz
National Security Advisor
RE:
Summary of Related Events to NYSE Malware Episode
Last week, you asked me to follow up, informally, on some matters resulting from the events surrounding the discovery of the ongoing malware operation in the Exchange’s trading engines and the Toptical IPO. Here’s what I’ve come up with. If you need more detail, just let me know.
I’ll begin with Toptical. As I’m sure you know, it’s been acquired by Tencent, a major Chinese media company.
As I’m sure you’ve also heard, the SEC and NYSE are, once again, considering serious regulation of high-frequency traders. They haven’t got it right in the past, and I doubt they will this time.
The major credit for stopping this unprecedented criminal penetration of the Exchange software goes to Robert Alshon, Senior SEC Investigator in NYC. He’d been on this case for a week. When he saw the IPO going askew, he strongly urged trading be suspended. He’s scheduled to take over the SEC New York Regional Office. We need more like him.
Yes, you were correct. The operation was being run by an organized crime family in Brazil. Our sister agency that handles such matters has been vague on details, but I’m assured we can confidently expect the operation to be shut down for good.
As for Jeff Aiken and Frank Renkin, they had no involvement in the rogue code. They were set up by those responsible. It is regrettable they were ever suspects, but these things happen. I’m assured they just want it all laid to rest.
The actual perpetrator was Abílio Ramos, aka Marc Campos, a longtime and trusted employee of the Exchange IT security department. After learning of the death of the leader of the criminal cartel for which he worked, he elected to cooperate in exchange for a reduced sentence. He managed the fraud with the assistance of just one other in-house employee, Richard Iyers. Iyers was found murdered in the alley not far from the Exchange. Police don’t know if this is a coincidence or related. There are no suspects.
All in all, what we have is a satisfactory ending to what could have been a very messy outcome. I’ll be in D.C. next week. Let’s get together if you have time.
BIBLIOGRAPHY: ADDITIONAL INFORMATION ON HIGH-FREQUENCY TRADING
BOOKS
Arnuk, Sal. Broken Markets: How High Frequency Trading and Predatory Practices on Wall Street are Destroying Investor Confidence and Your Portfolio, FT Press, 2012.
Bodek, Haim. The Problem of HFT: Collected Writings on High Frequency Trading & Stock Market Structure Reform, Decimus Capital Markets, LLC, 2013.
Connaughton, Jeff. The Payoff: Why Wall Street Always Wins, Prospecta Press, 2012.
Durbin, Michael. All About High-Frequency Trading, McGraw-Hill, 2010.
Harris, Larry. Trading and Exchanges: Market Microstructure for Practitioners, Oxford University Press, 2002.
Narang, Rishi. Inside the Black Box, Wiley, 2013.
Patterson, Scott. The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It, Crown Business, 2010.
———. Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock, Crown Business, 2012.
&nb
sp; WEB SITES
“The Professional Page of Haim Bodek,” accessed March 2014, http://haimbodek.com/.
“Scott Patterson Reports,” accessed March 2014, http://www.scottpatterson reports.com/.
“NYSE Euronext Markets,” accessed March 2014, http://usequities.nyx.com/markets.
“TabbFORUM,” accessed March 2014, http://tabbforum.com/.
“Nanex,” accessed March 2014, http://www.nanex.net/.
“Themis Trading,” accessed March 2014, http://blog.themistrading.com/.
“Modern Markets Initiative,” accessed March 2014, http://modernmarket sinitiative.org/.
“U.S. Securities and Exchange Commission Market Structure,” accessed March 2014, http://www.sec.gov/marketstructure/.
PAPERS
Senator Kaufman’s nine-point plan for market structure reform, August 5, 2010. Accessed March 2014. http://www.sec.gov/comments/s7-27-09/72709-96.pdf.
Dolgopolov, Stanislav, “The Maker-Taker Pricing Model and Its Impact on the Securities Market Structure: A Can of Worms for Securities Fraud?,” February 23, 2014. Posted February 24, 2014. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2399821.
Dolgopolov, Stanislav, “High-Frequency Trading, Order Types, and the Evolution of the Securities Market Structure: One Whistleblower’s Consequences for Securities Regulation,” Last revised January 23, 2014. Posted August 22, 2014. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2314574.
Joint CFTC-SEC Advisory Committee, “Recommendations Regarding Regulatory Responses to the Market Events of May 6, 2010,” February 18, 2011. Accessed March 2014. http://www.sec.gov/spotlight/sec-cftcjointcommittee/021811-report.pdf.
U.S. Securities and Exchange Commission, “Concept Release on Equity Market Structure,” 2010. Accessed March 2014. http://www.sec.gov/rules/concept/2010/34-61358.pdf.
“NASDAQ OMX Order Type Guide,” April 2013. Accessed March 2014. http://www.brainshark.com/nasdaqomx/vu?pi=zF7zJ6aUZzoG0z0.
“Direct Edge Order Type Guide,” Accessed March 2014. http://www.brainshark.com/DCS/vu?pi=zGwzPWcfUz3QRKz0.
VIDEOS AND PODCASTS
“Haim Bodek—HFT is an Artificial Industry,” YouTube video, 43:40, from a presentation by Haim Bodek to TradeTech USA 2013 on February 27, 2013, posted by Trade TechTV, Apr 26, 2013, https://www.youtube.com/watch?v=ItfAKguEdAE.
“Discussing HFT with Haim Bodek,” The LoopCast recording, posted March 3, 2014, http://www.theloopcast.com/2014/03/03/discussing-hft-with-haim-bodek/.
“The Wall Street Code,” YouTube video, 50:31, posted by VPRO Blacklight on November 4, 2013, http://www.youtube.com/watch?v=GEAGdwHXfLQ.
“Money & Speed: Inside the Black Box,” YouTube video, 48:23, posted by VPRO Blacklight on December 13, 2012, http://www.youtube.com/watch?v=aq1Ln1UCoEU.
ALSO BY MARK RUSSINOVICH
Zero Day
Trojan Horse
ABOUT THE AUTHOR
MARK RUSSINOVICH works at Microsoft as a Technical Fellow, Microsoft’s senior-most technical position. A cofounder of Winternals, he joined Microsoft when the company was acquired in 2006. He is author of the novels Zero Day and Trojan Horse, as well as the popular Sysinternals tools, co-author of the Windows Internals book series, a contributing editor for TechNet Magazine, and a senior contributing editor for Windows IT Pro Magazine. He lives in Washington State.
This is a work of fiction. All of the characters, organizations, and events portrayed in this novel are either products of the author’s imagination or are used fictitiously.
THOMAS DUNNE BOOKS.
An imprint of St. Martin’s Press.
ROGUE CODE. Copyright © 2014 by Mark Russinovich. Foreword copyright © 2014 by Haim Bodek. All rights reserved. For information, address St. Martin’s Press, 175 Fifth Avenue, New York, N.Y. 10010.
www.thomasdunnebooks.com
www.stmartins.com
Cover design by Ervin Serrano
Cover photographs:
man by CollaborationJS/Arcangel Images;
texture by Shutterstock.com
eBooks may be purchased for business or promotional use. For information on bulk purchases, please contact Macmillan Corporate and Premium Sales Department by writing to MacmillanSpecialMarkets@macmillan.com.
The Library of Congress has cataloged the print edition as follows:
Russinovich, Mark E.
Rogue code: a Jeff Aiken novel / Mark Russinovich. — First edition.
pages. cm.
ISBN 978-1-250-03537-0 (hardcover)
ISBN 978-1-250-03538-7 (e-book)
1. Cyberterrorism—Fiction. 2. Suspense fiction. I. Title.
PS3618.U7688R64 2014
813'.6—dc23
2014008414
e-ISBN 9781250035387
First Edition: May 2014