GQ’s Bitcoin article: Inside the £8 billion swindle

British-GQ-September-2016-463x600-9051798I don’t get it.

On its September 2016 cover, British GQ labels Craig Wright’s claim to be the inventor on Bitcoin a swindle, but then inside the author is still falling for parts of Wright’s con — the main one being that the late Dave Kleiman is a computer genius who could be the elusive Satoshi Nakamoto.

Pretty much everything we know about Kleiman comes from Wright and shouldn’t be trusted. There is absolutely nothing concrete to suggest Kleiman is the Bitcoin inventor. It’s almost comical when, along with the Wright claims about Kleiman, GQ cites the fact he was a guest commentator on security issues on CNN and ABC, that he had a lot of certificates from various courses he’d taken, and that he lived in the eastern US time zone as reasons for why he could well be Satoshi Nakamoto.

It’s just bizarre how much people want to believe this Wright and Kleiman tale when there’s zero proof to back it up and lots of evidence that Wright is a serial liar and a belligerent fool. As for Kleiman, I do not wish to suggest in any way that he is part of this con. He’s dead and can’t speak for himself, which makes it very easy for others, like Wright, to speak for him.

The GQ article doesn’t name Wright’s backers apart from Robert MacGregor, who seems to have been appointed as the public face of the operation. MacGregor may still be working for online gambling tycoon, Calvin Ayre, who was his boss when he was employed by Riptown Media in Vancouver last decade. Neither he nor Ayre responded to emails requesting comment about their relationship.

At this point, I still don’t know if Wright fooled Ayre and MacGregor, and if they really paid him $15 million, as the LRB maintains, and set him up with a team of 30 employees, as Wright claims in GQ. Sure Ayre’s a gambler but putting a guy who conducts himself like Wright does in charge of anything seems like a really, really stupid bet. And it’s weird that Wright says he didn’t want to come out as Satoshi while sources are telling GQ he was forced to do it by his backers. There just seems to be a whole lot of image and story crafting going on.

I’m still not sure what the real story is supposed to be, but I have a feeling it will all be told eventually. The GQ piece isn’t online yet. It’s only available in print. However, the magazine did post stunning audio of Wright’s foul mouthed tirade when he was confronted last May with the fact that his “proof” that he created Bitcoin was less than convincing.

GQ interview: Is Craig Wright the bitcoin genius? from Joseph Ingham on Vimeo.

Questions re that London Review of Books article on Bitcoin

So I finally read the London Review of Books’ magnum opus on Craig Wright, apparent pretender to the Bitcoin throne. I had never bought that Wright invented Bitcoin and the article — all 35,000 words of it — did nothing to convince me otherwise.

wright_twitter_profile

Wright had always struck me as a self promoter not a self effacing type prepared to forego the praise and attention lavished on brilliant inventors. He also seemed very concerned about his image as projected by his clothes and the photos he used to represent himself. Modest types don’t tend to call themselves “Dr.” and show themselves off in evening wear on social media.

The whole Canadian investor thing didn’t sit right either. Robert MacGregor and his company nTrust say they are in the “cloud money” business, but when I looked at their website, MacGregor was no longer listed as CEO. Nor could I figure out what exactly nTrust did and why it would be beneficial to use it. It certainly didn’t strike me as a company making so much money that its CEO would have $15 million to invest in bailing out the broke supposed inventor of Bitcoin. (nTrust apparently set up nCrypt, a new subsidiary to handle at lease some of the Bitcoin business.)

I also found it strange that while the LRB strongly hints at the involvement of Calvin Ayre in this whole Wright/Bitcoin affair, it didn’t mention that MacGregor too has ties to Bodog and Ayre going back years.

MacGregor worked at the Bodog affiliate, Riptown Media, in Vancouver for years. When he set up nTrust, it was with a group of former Riptown employees. nTrust also appears to have ties to Ayre. When police raided Ayre-linked companies in the Philippines in 2013, Robert MacGregor’s name was listed on the search warrants.

The Manila Times reported that nTrust, also known as Fenris Ventures, was suspected by Filipino police of being a front for Ayre’s illegal gambling operations. Ayre flatly denied all accusations of wrongdoing and took prosecutors and police to court, claiming there was no basis for the warrants. The Philippines appeals court recently ruled in his favour that it was an illegal search and seizure operation.

That’s about the extent of what I know for now but if you have further information I would love to hear from you. The Bitcoin inventor saga fascinates me and I would like to know more about the relationships between Robert MacGregor, Craig Wright, Stefan Matthews and Calvin Ayre.

The big question in my mind and for now is whose idea was it that Craig Wright should claim he invented Bitcoin?

ann.brocklehurst@gmail.com

 

Crown seeks direct indictment in Laura Babcock murder case

The Crown is seeking a direct indictment in the Laura Babcock murder case, raising further questions about the original investigation into her disappearance by Toronto police.

If the direct indictment is granted, it should be announced over the next few weeks and the case against the accused, Dellen Millard and Mark Smich, will proceed directly to trial without a preliminary hearing.

A direct indictment was granted last July for the related murder trial of Tim Bosma, where Millard and Smich are also charged. At the time, Attorney General Madeleine Meilleur commented: “I’m not going to speak about the case, but when this procedure is supported, it’s because there is good evidence that the person being accused will become convicted.”

Brendan Crawley, a spokesperson for the Attorney General, said the ministry does not comment on whether requests for direct indictments have been made in a specific case.

Smich and Millard are pleading not guilty on all counts and none of the allegations against them have been proven in court.

The Babcock case is very different from the Bosma murder in terms of what the public knows about the evidence. Police have said that Tim Bosma’s remains, burned beyond recognition, were found on Millard’s farm near Ayr, Ontario, and that Bosma’s truck was found in a trailer parked in the driveway of Millard’s mother, Madeleine Burns, in Kleinburg, north of Toronto. The Hamilton Spectator has reported that the victim was incinerated in a livestock incinerator found on Millard’s animal-less farm and purchased through Millardair.

In contrast, none of the evidence in the Laura Babcock case has been made public. There is also no body although the Hamilton Spectator reported that its sources believe Babcock was incinerated shortly after her disappearance in July 2012.

Many questions have been raised about how the Laura Babcock investigation was originally handled by Toronto police, who have been severely criticized for not following up on a mobile phone bill showing that the last eight phone calls she made were to Dellen Millard.

Sgt. Stephen Woodhouse — who was the lead detective in the original 2012 search for Laura Babcock told the National Post in May 2013 that investigators were never aware of any relationship between her and Dellen Millard. Contradicting her parents and ex-boyfriend, who said they had repeatedly brought the phone records to police attention, Sgt. Woodhouse said police did not see them until after Millard was arrested for the Tim Bosma murder. (Although, according to TPS operating procedures, investigators should have acquired the phone records of anyone missing under such circumstances, whether given to them by the family or not.)

“In this case we had no idea where Laura was living at the time, who her circle of friends were, what she was doing,” said Sgt. Woodhouse, who has since taken another position within Toronto Police and is no longer assigned to the case.

“In a city of 3 million people, where do you start?” he said. “We did the standard press release and put her picture out there… We followed the leads that we had.”

That the Crown would apply for a direct indictment indicates that they think they have a very strong case against Millard. This means that once police got serious about the Babcock disappearance investigation they don’t appear to have had too much difficulty finding evidence. It raises the question once again of why the investigation into Laura’s disappearance was so different pre- and post-Millard’s arrest.

In addition to the Bosma and Babcock murders, Dellen Millard has also been charged with the murder of his father, Wayne. No direct indictment is being sought in that case. Given that the Babcock and Bosma murder cases are being handled by different jurisdictions, it’s highly unlikely they will be joined and tried together.

Once again, none of the allegations against Millard and Smich have been proven in court. They are innocent until proven guilty.

What happened to Jeffrey Boucher? Read my new e-book on the case of the missing runner

Read my new e-book: The Mysterious Death of Jeffrey Boucher

You can buy it on Amazon

It’s an account of the events surrounding the disappearance of the Whitby dad and my theory on what happened to Jeffrey Boucher.

Buy The Mysterious Death of Jeffrey Boucher (or read the free sample)

Matthew Ward-Jackson: Believed to have sold Dellen Millard the gun used to kill his father, Wayne Millard

Matthew Ward-Jackson

Matthew Ward-Jackson, not as he appeared in Toronto court via video earlier today

Full story tomorrow. Here’s some background in the meantime.

Update June 10: My story is now up at the National Post. The first two paragraphs are below and here’s another photo of Matthew Ward-Jackson.

Do you see the man with the blacked-out eye in the top righthand corner?

Do you see the man with the blacked-out eye in the top lefthand corner?

The active social media life of a man believed to have sold a gun to accused triple murderer Dellen Millard has added another layer of mystery to what was already a bizarre case.

Matthew Ward-Jackson, charged with weapons trafficking in April, has almost no web presence  under his own name. Instead, the 27-year old with a tattooed face and body uses  the online aliases @Krucifix14, Krucifix North and @BIGiisho to document his life as an aspiring gangsta-style rapper. Instagram photos, YouTube videos and Facebook posts show him pouring champagne over women’s thong-clad backsides, literally throwing money around, driving classic cars and, more incongruously, taking bubble baths in a heart-shaped red tub.

Read the whole thing at the Post.

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There was ‘something off’ about alleged murderer Mark Smich

Accused killer Mark Smich gave off a bad vibe while selling cigarettes to underage students at Oakville high schools, according to one of his former customers.

“There was something off, something strange about him,” said the young man, whose name cannot be printed due to a publication ban covering all evidence relating to the trial of Mark Smich and his co-accused, Dellen Millard, for the first degree murder of Laura Babcock.

Smich’s former customer told police, who questioned him on a number of occasions, that he didn’t know his former cigarette supplier well. “I was not afraid, but not 100 percent comfortable” around him, he said.

Both Smich and Millard are pleading not guilty to all murder charges against them.

Accused murderer Mark Smich lived at home of Wayne and Dellen Millard

Accused Murderer Mark Smich

Houseguest Mark Smich (above) and his host Dellen Millard are charged with the murders of Tim Bosma and Laura Babcock. Dellen Millard is also accused of murdering his father Wayne. They are pleading not guilty to all the charges. (Photo: Facebook)

Since I wrote my Grid article on the Toronto Police investigations into the murders of Wayne Millard and Laura Babcock, a number of facts have come to my attention.

Mark Smich and his girlfriend, whose name cannot be printed due to a publication ban, were living in the basement of Wayne MIllard’s Etobicoke home for several weeks (at least) before he was allegedly murdered. They were not in a separate apartment, but right in the same house.

In the past, Dellen had had other friends live in the basement, and although his father was not happy with this communal living situation, he never kicked anyone out. Instead, Wayne used tactics like not stocking the fridge in the hopes that this would make the basement a less attractive crash pad.

After Wayne MIllard was allegedly murdered, Dellen; his mother, Madeleine Burns; and his ex-fiancee were all present as police investigated the death that night. Smich was not there.

The Hamilton Spectator reported last month that Wayne was killed with a trafficked gun.

At the time of Wayne’s death in November 2012, basement resident Mark Smich had  two convictions from drug possession charges, two fail to comply convictions and one conviction for impaired driving. The previous month, he had been charged with mischief under $5,000 for spray-painting an Oakville overpass.

Smich and Dellen Millard are charged with the first degree murders of Tim Bosma and Laura Babcock. Millard is also charged with the first degree murder of his father Wayne. Both men are pleading not guilty to all the charges against them.

If you have more information, please contact me at ann.brocklehurst@gmail.com.

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Toronto police investigations into the deaths of Laura Babcock and Wayne MIllard

I have a new article in the Grid about the Toronto police investigations into the deaths of Laura Babcock and Wayne MIllard:

This past Thursday, there was a major breakthrough in the puzzling murder case of Tim Bosma, the Ancaster, Ont., man who put his Dodge Ram truck up for sale online last spring, went for a test drive with two prospective buyers, and never returned. The young father’s tragic death was one of the biggest stories of 2013, but for months there had been almost no news. The accused killers—Dellen Millard, the heir to an aviation company, and his friend Mark Smich—had both pleaded not guilty; the case was slowly winding its way through the courts.

 

Those who have been closely following the case weren’t expecting to hear much more until the trial begins in 2015. I had become increasingly pessimistic about whether two linked investigations by Toronto police involving Millard would ever yield results. So it was a huge surprise last Thursday when he was charged with two more first-degree murders: that of his father, Wayne, whose 2012 shooting death had been initially ruled a suicide; and that of Laura Babcock, a friend of Millard’s who went missing in 2012. (Smich is also facing a first-degree murder charge in the death of Babcock.)

Read the whole thing.

Keep up to date on the Dellen Millard investigations. Receive my newsletter. Just add your email address below:


Before Tim Bosma: The original investigations into Laura Babcock and Wayne Millard

Dellen Millard was accused of killing Tim Bosma in 2013. Then last week, he was charged in two more murders dating back to 2012—which raises the question: if Millard had been in custody sooner, would Bosma still be alive?

This past Thursday, there was a major breakthrough in the puzzling murder case of Tim Bosma, the Ancaster, Ont., man who put his Dodge Ram truck up for sale online last spring, went for a test drive with two prospective buyers, and never returned. The young father’s tragic death was one of the biggest stories of 2013, but for months there had been almost no news. The accused killers—Dellen Millard, the heir to an aviation company, and his friend Mark Smich—had both pleaded not guilty; the case was slowly winding its way through the courts.

Those who have been closely following the story weren’t expecting to hear much more until the trial begins in 2015. I had become increasingly pessimistic about whether two linked investigations by Toronto police involving Millard would ever yield results. So it was a huge surprise last Thursday when he was charged with two more first-degree murders: that of his father, Wayne, whose 2012 shooting death had been initially ruled a suicide; and that of Laura Babcock, a friend of Millard’s who went missing in 2012. (Smich is also facing a first-degree murder charge in the death of Babcock.)

While the Hamilton Police have been handling the investigation into Bosma’s death, Toronto Police Services has jurisdiction in Babcock’s and Wayne Millard’s alleged murders. Family and friends of Babcock have voiced concerns about how TPS dealt with her case. Journalists have also been critical. Even the typically cop-friendly Toronto Sun criticized homicide detective Mike Carbone for praising the Babcock investigators as “thorough” and “very diligent,” given the evidence of delays and confusion in the investigation.

Since last May, when I started covering the story of Dellen Millard, I have spoken extensively with friends and relations of his alleged victims and filed several access to information requests to better understand the process the police undertake when dealing with missing persons and suicides. My research raised serious questions about the investigations, whether basic protocols and procedures were followed, and, more significantly, whether Bosma’s death could have been prevented.

Laura Babcock, a 23-year-old recent graduate from the University of Toronto, disappeared in the summer of 2012. In the months before her death, her life started falling apart. Friends say she was struggling with mental illness, using recreational drugs, and moving from temporary home to the next. According to police, she had also begun advertising her services online as an escort. In late June, she met up with her ex-boyfriend Shawn Lerner, who loaned her his iPad so she could look for work, and he paid for her to stay at a west-end hotel. Then, in early July, she went silent. Lerner reported her missing to Toronto police on July 14; her parents followed up not long after.

Last December, I met up with Lerner at a north Toronto food court. He stressed to me that from the time he walked into the 32 Division police station near Yonge and Sheppard to report Babcock missing, no one seemed to care—allegations he’s made previously in the media. The officer on duty agreed to take the report, but Lerner says that he laughed at the suggestion that it might be possible to trace the iPad loaned to Babcock and accused Lerner of playing CSI. Then Lerner brought up the fact that Babcock had been using drugs. “As soon as they heard about the drugs, that’s when they just wrote her off,” he said.

Babcock’s cellphone bill shows that the last eight phone calls she made after she disappeared were to Dellen Millard. Babcock’s parents and Lerner have repeatedly stated that they gave the bill to police. They also followed up with Sgt. Stephen Woodhouse, the officer in charge of the investigation, but Lerner says the officer did not return his emails and that his voicemail was often full. (In a May 2013 National Post story, Woodhouse said that the original investigators were not aware of the relationship between Babcock and Millard, and that her phone records were not brought to their attention at the time.)

Dismayed by the lack of response, Lerner, who has acted as a kind of unofficial spokesman for the Babcock family, contacted Millard himself. Lerner still has the text messages he sent to the accused killer, who he knew casually through Babcock. In one text, Lerner wrote that he was not making accusations but trying to get information. Millard responded almost immediately to suggest a meeting.

When the two men met for coffee the next day, Lerner said that Millard initially denied having spoken with Babcock. But after Lerner produced the phone bill from his bag, Lerner said that Millard changed his story, saying Babcock had contacted him looking for drugs. Lerner says he passed this information on to Woodhouse.

By spring of 2013, the investigation into Babcock’s disappearance had pretty much stalled. Woodhouse had been transferred to another position. When asked about the case by theNational Post in May of that year, he said, “In a city of three million people, where do you start? We did the standard press release and put her picture out there…. We followed the leads that we had.”

In early June 2013, shortly after he was put in charge of the Babcock and Wayne Millard cases, homicide detective Mike Carbone spoke at a press conference. He made no mention of the major case management (MCM) system, which was implemented in Ontario in the late ’90s in response to the policing and communications failures revealed in the wake of the Paul Bernardo case. According to the TPS Policy and Procedure manual, the relevant pages of which were obtained through a freedom of information request, in any missing-persons case where foul play is suspected, the officer in charge must ensure that “a Major Case Manager is assigned to conduct the investigation in compliance with the Ontario Major Case Management Manual.” Police appeared to have not suspected foul play in the disappearance of Babcock, despite the fact she’d been missing for months, had left her passport with her parents, and had not made any financial transactions nor used her health card or phone since June 2012.

To the astonishment of reporters at the news conference, Carbone said that officers had only become aware of Babcock’s phone records in May 2013 as a result of the arrest of Millard for Bosma’s murder. Carbone later contradicted himself, saying that “at some point [during the investigation into Babcock’s disappearance] the officers from 22 Division would have conducted searches on her telephone and discovered those records.” When a reporter then asked if officers had ever spoken to Millard, Carbone replied: “I don’t believe the police interviewed Millard at the time.” I contacted Carbone a few weeks after the news conference and asked him to clarify this point, but he declined to comment due to the ongoing nature of the investigation.

babcock-bkgd-878x494

Laura Babcock’s phone bill showed her last eight phone calls before she disappeared were to Dellen Millard

On Nov. 29, 2012, 22 Division police in Etobicoke were alerted by a 911 call to investigate the shooting death of 71-year-old Wayne Millard at the home he shared with his son, Dellen. Just before he died, Wayne had completed the building of a new, multimillion-dollar Millardair operation at the airport in Waterloo, Ont. A pilot by training, he had inherited the family aviation business and planned on running the new venture, which he called Dellen’s project, with his only child.

Until last week, police had released scant information about his death. At the Babcock news conference in 2013, Carbone declined to answer questions about who had phoned 911 or found the body. He also refused to confirm newspaper reports that Wayne had been shot in the eye. He did, however, praise the police who looked into the death and classified it as a suicide for their “very thorough” work.

The Toronto Police Service protocols for investigations of suspected suicides emphasize “the need to remain vigilant for the possibility of foul play…[when] the only witness or person present at the time of death or finding of the body is an intimate partner past or present.”

Again, foul play does not appear to have suspected. Investigators never contacted executives at Millardair, according to Al Sharif, a consultant to the business. And the only relatives who appear to have spoken to police are Dellen and his mother. Wayne’s aunt, June Neill, wrote a comment on his online obituary that she had not been told about her nephew’s death or about the reception in his honour. (She died in February 2014.)

Complicating matters is the fact that the people Dellen did inform about Wayne’s death were told that he had died of an aneurysm. They only learned that it was a suspected suicide after the Bosma murder. I’ve spoken to more than a dozen people about Wayne, and not one has said they could imagine him killing himself.

The Babcock disappearance was not the first time Dellen Millard’s name had been brought to the attention of authorities. But since TPS has released only the barest details about their investigations into the deaths of Babcock and Wayne Millard, it’s not known whether they checked for and knew about Dellen’s previous contacts with police, or just didn’t see them as significant.

In 2009, a former tenant at Dellen’s west-end Toronto rental property —who was engaged in a dispute with him before the Landlord Tenant Board at the time—reported to police that she had found Millard and his friends tampering with the engine of her car the night before her hearing. A few years back, a neighbour of the Millards (who asked not to be identified) complained to police that Dellen and his buddies sped dangerously down the child-filled street. (Nothing came of these complaints.) According to a November 2013 article in theToronto Star, Millard had once been stopped by police and issued a contact card—the tattoo on his wrist that read “ambition” was recorded at the time, a detail that led police to him in the Bosma case.

This past September, on a fine Monday morning, police descended once again on Dellen Millard’s farm, near Cambridge, Ont., where Bosma’s remains had been found months earlier. This time, though, they were searching for evidence related to the disappearance of Babcock. There were Toronto homicide detectives, uniformed officers from the local Waterloo force, forensic technicians in lab coats, and an OPP HAZMAT team with oxygen tanks strapped to their backs and gas masks covering their faces. The road was lined with fire trucks, buses, and vans carrying television news crews.

Soon after this search, the OPP confirmed that  it was in charge of the three Millard-related investigations under the auspices of the major case management system. As part of their responsibilities, they also began dealing with the press. In November, lead Det. Insp. Dave Hillman spoke to me frankly and openly about how major case management works and why everything crime- and justice-related seems to drag on for so long. But he declined then to provide any new information about the state of the individual investigations, which continue to be run by the Toronto and Hamilton police.

When I visited Toronto police headquarters in February to pick up some documents, I dropped by the media office to try once again to find out if there was anything at all they could tell me about the initial handling of the Babcock and Wayne Millard investigations. Would it be possible, for example, to say whether detectives looking into Wayne’s death knew about Dellen allegedly messing with his tenant’s car? Or could police explain why Wayne’s body was released for cremation when the coroner’s office said in May that the investigation into his death was still open?

Spokesman Mark Pugash politely explained that it simply wasn’t possible to provide answers. If a review of a criminal investigation is ever deemed necessary, it doesn’t take place until the criminal investigation is settled. Disciplinary actions don’t run concurrently.

There is little doubt the developments of the past week will have an impact on this story. Now that Millard has been charged with the murders of his father and Babcock, both cases are back in the headlines. It will be difficult to ignore any irregularities in the investigations. Was standard protocol followed? If not, will anyone be held accountable? And what are the Toronto police doing to ensure oversights don’t occur? The families and friends of the victims, and all the people of Toronto, have a right to know.

Who is Christina Noudga? Charged with accessory to Tim Bosma’s murder after the fact

Christina Noudga, shown here on a 2011 skydiving outing with boyfriend Dellen Millard, has been charged as accessory after the fact in the murder of Tim Bosma

Christina Noudga, shown here on a 2011 skydiving outing with boyfriend Dellen Millard, has been charged as accessory after the fact in the murder of Tim Bosma. Credit: Facebook

Christina Noudga, the girlfriend of Dellen Millard, has been charged as an accessory after the fact to murder in the death of Tim Bosma.

Noudga, 21, had been seeing Millard — who is charged with murdering Bosma, his father, Wayne Millard, and Laura Babcock — since the summer of 2011 shortly after he broke off his engagement to another Toronto woman.

Noudga lawyered up quickly after her boyfriend’s arrest and refused to give police a statement. She only talked after her arrest.

Noudga was also a friend of Laura Babcock, who disappeared in the summer of 2012 and made her last mobile phone calls to Dellen Millard. According to a friend of Babcock, Laura had told Noudga that she and Millard had become more than just friends. Police last year described Babcock’s relationship to MIllard as a non-traditional dating situation.

Noudga was a member of the “Help Us Find Laura” Facebook group before she took her profile down.

Last October, the Hamilton Spectator reported on a brief court discussion about having a certain woman removed from Milard’s “do not contact” list.

“At this stage, she has not given a statement to police and I can’t say she has relevant information,” Crown attorney Tony Leitch told the court.

For procedural reasons, the judge declined to deal with the matter and the woman. remained on the list. Due to a publication ban, the newspaper did not provide further details. There is more than one woman on Millard’s no-contact list.

How HFT firms access secure government briefings to get the jump on market-moving data

In which I pick up where Michael Lewis’s fascinating, new book Flash Boys leaves off


You start to follow the money, and you don’t know where the fuck it’s gonna take you.
-Det. Lester Freamon

In Montreal in the fall of 2007, a former journalism student of mine asked if I would serve as a reference for him. He hoped to be hired for what had in recent years become a rarity, a well-paid, entry-level journalism job. The position was at a local organization that I had never heard of and whose name is so very boring that I fear if I tell it to you, you may stop reading before my story has even begun.

So please consider before I reveal the name in question that it might have been picked not in spite of its boringness but precisely because of it. If you wanted to fly under the radar in the world’s financial and media capitals, could there be any better way to do so than as a representative of the Canadian Economic Press or CEP News for short?

Whether that utterly unsexy name was a stroke of inspired genius or sheer dumb luck, I will likely never know, but what I can tell you is that Canadian Economic Press was just one of several strange “news agencies” that I later discovered were tied to the secretive world of high frequency trading or HFT as it’s known. Along the way I also encountered many of the same things Michael Lewis did in Flash Boys : bumbling FBI agents, clueless government regulators and employees who didn’t know what the firms they worked for really did. Just like Flash Boys does, my HFT story ends with a microwave tower.

All of this happened because, as someone who is interested in the future of the troubled news industry, I was curious to find out how exactly how Canadian Economic Press planned to make money and who the people behind it were. The explanations provided by its marketing director, Paula Midena, made no sense to me. She said that CEP News had been founded to report on global economic news from a Canadian perspective, not a product for which there’s a booming market, and that the man in charge was Darren Corbett while the “original investor,” was Canadian Venture Media Corporation, neither of whom had profiles either on the internet or in various research-worthy databases.

Since Midena couldn’t or wouldn’t tell me more and no one else at Canadian Economic Press was available to talk, I posted the information I’d obtained on my blog and hoped that someone who knew about the situation would eventually find me and fill me in. The strategy worked and over the next few months I learned from anonymous commenters that Canadian Economic Press had suddenly shut down its Washington operations, that I should check out the D.C.-based Need To Know News (NTKN) agency, which had been started by Chicago traders and bore a strong resemblance to Canadian Economic Press, and that, according to a commenter using the name Tdot: “There’s tons of these news startups with bad business models. Here’s another one that’s hilarious, World Business Press (WBP Online) – Slovakian newswire, with an office in Canada, releases Canadian economic news… in English. How much demand can there be for that in Slovakia?”

Puzzled as I’d been by the advent of Canadian Economic Press, it was even more perplexing to learn that it was not alone. Beyond their acronymous names, CEP News, NTKN and WBP Online had a lot of other characteristics in common: very basic websites, mediocre news feeds, little to no information about who owned or ran the companies, and lots of young inexperienced reporters, almost none of whom seemed interested in how their employers were making money at a time when many traditional media companies were in deep financial trouble.

Once in a while, however, one of these employees would get curious, go rogue and send me an email. “At CEP, staff welfare goes to a whole new level,” wrote a journalist, whose Spidey senses were tingling. “Not only do you have free coffee, tea, juice and bottled water – there are fruitcakes, cupcakes, bread, cereal, cereal and fibre bars to go with it. Thats the breakfast sorted. Then every Friday – the ENTIRE Montreal staff (we’re looking at 25-30 people) get meals of their choice catered to the office all paid for by the company. The evening is rounded off at the Keg, a couple of streets from the Montreal HQ. Extraordinary isn’t it?”

Indeed it was and especially given the fact that CEP news had told the Canadian embassy in Washington that it had decided to close its D.C. bureau due to its investor pulling out. Determined to get to the bottom of the situation, I spent evening after evening on my laptop, glass of wine in hand, as I surfed the websites of forex trading companies registered in Cyprus and Belize, stalked the LinkedIn profiles of Montreal investment managers, and tried to decipher both Slovak company registration documents and the incomprehensible language on the websites of Chicago-based proprietary trading companies otherwise known as prop shops. On a few memorable occasions I thought I’d discovered the key to it all, but when I awoke the mornings after I quickly realized my theories made no sense. By the time CEP News folded in April of 2009, I still hadn’t figured out what was going on and was starting to doubt that I ever would.

It was in one of my dark moments that the email I’d been waiting for for almost a year and a half arrived. It was from a trader who, though he did not wish to be named, was prepared to reveal his identity, unlike almost everyone else. He informed me that Canadian Economic Press had been funded by a Montreal-based proprietary trading firm called Vigilant Futures (which has since changed its name to Vigilant Global.) In the early days, he said, Vigilant Futures and CEP News had even shared office space. Arvind Ramanathan, one of Vigilant’s two directors, and Marco Gomez, who ran CEP’s operations in the absence of the elusive Darren Corbett, had both worked together as traders at Refco before it collapsed amid scandal in 2005. When I phoned Ramanathan, he confirmed to me that Vigilant Futures had invested in Canadian Economic Press to help out his friend Marco, but that the venture hadn’t worked out and had had to close down.

Once I learned that a trading company had been behind Canadian Economic Press, I was forced to reconsider a theory I’d initially rejected about CEP’s and the other news agencies’ whole raison d’être, namely that their main goal was to gain access to secure government briefing sessions all over the world. These “lock-ups”, as they’re known, are where government agencies regularly release key financial indicators to reporters, who in turn disseminate the data to the public at what is supposed to be exactly the same time. When the information is surprising — better than expected unemployment figures, for example, or an unexpected hike in interest rates — financial markets react. The advantage and profits go to the traders who get their first.

Given that I had reported from lock-ups, as a journalist for Reuters, one of the big three financial news companies, I was convinced there was no way anyone could systematically leak sensitive economic information to traders. On the rare occasions that I’d seen someone unintentionally break a lock-up embargo, irate officials from the central bank or finance minister’s office were on the phone within minutes. Journalists worried about losing their jobs over an accidental leak while intentional leaking could result in criminal charges. Regulators were constantly on the lookout for suspicious trading patterns ahead of a key economic data releases and ready to pounce if they saw any signs of insider trading.

What I’d failed to figure out, however, was that it wasn’t necessary to leak to have an advantage in lock-ups. I still pictured traders waiting by their screens, with fingers on buttons, and ready to pounce when Reuters (now Thomson Reuters), Bloomberg and Dow Jones all delivered their news and numbers at the appointed time. I didn’t understand that simultaneous no longer meant at the same minute or second and that so-called high frequency traders now worked in milli and microseconds. I didn’t appreciate that the new best way to do things was with so-called machine readable feeds that were algorithmically programmed to buy and sell automatically without the need for any microsecond-sapping human intervention. I didn’t realize that a trade could be carried out in less time than it took to blink an eye and that several of the news agencies in the lock-ups were using their own dedicated fibre optic lines to send data directly to their clients, whoever those clients were.

I wasn’t the only person who didn’t get this. Neither did the folks in charge of the lock-ups, most regulators, law enforcement agencies and the upstart news services’ competitors. As an anonymous source would later succinctly explain it: “(The new news agencies) were light years ahead technology wise over DJ, Reuters, Bloomberg, AP, etc. They built highly optimized networks to transfer this data through ultra low latency switches and lines that the other guys never thought of. They also were optimized to this single rifle shot of data through a network where the big legacy guys were using systems/networks optimized for throughput and continuously publishing hundreds or thousands of stories simultaneously and continuously.”

Keeping all this in mind, along with the fact that the stated purpose of government lock-ups is to inform the public and not to provide an infrastructure for high frequency traders, the obvious next question became why no one had kicked the wonky news agencies to the curb? But when I tried to discuss this issue with those responsible for the lock-ups, they proved almost as secretive and loath to talk about their business as the HFTs had been about theirs.

There had been complaints about NTKN and its relationship to specific Chicago traders, some of which are documented on the internet, since its arrival on the scene in 2005 yet it still managed to keep its much coveted seat in the U.S. Department of Labor lock-ups . And though CEP News had its access to Office of National Statistics lock-ups in England — where it was briefly allowed entry, thanks to a newly hired staffer who already had valid press credentials — revoked, it easily gained admission to lock-ups in Ottawa and Frankfurt. Econolive, yet another strange news agency which sprung up at about the same time Canadian Economic Press went under in 2009, was welcomed into lock-ups in Ottawa, Washington, and, for a short while, London. Run by an Israeli American named Yakov (Yankey) Mermelstein, who had no background in the news business and a history of active participation in web trading forums, it also used the name Empire News and had a corporate address in Jerusalem.

I was starting to think that instead of an indecipherable investigative report on incompetence in the administration of G-7 lock-ups, I might be better off writing a sitcom script. The pilot could focus on an email I’d just received from the FBI — which did not from an fbi.gov address but rather from Concerned Citizen at forbrocklehurst@gmail.com. “Ms. Brocklehurst,” read the email, “Any chance you’d be willing to talk by phone about your posting Monday regarding the visitors to your site? If so, could you send me a number where I could reach you this morning?”

The blog posting in question showed that officials at the U.S. Securities and Exchange Commission were searching my website for information on the news agencies and their owners. Concerned Citizen, who had a thick southern accent and identified himself as a United States special agent named Bob, asked if I’d be willing to take my post down as it could interfere with his investigation . He said someone at the SEC had erred in not using secure computers for their research and buttered me up by telling me how he and his colleagues checked out my website regularly. This was a very big story, he said, hinting that there might be a scoop or two in my future if did him this favour, which I did indeed do.

While I had initial suspicions that Agent Concerned Citizen might be a hoaxer, he wasn’t. The FBI turned out to be even worse at secure surfing than SEC employees and somehow managed to leave information stored in their C-drive files, including employees’ first names, on my web traffic monitoring program. So when Agent Concerned Citizen failed to return my emails, I did what I should have done all along and published the evidence showing the sorry state of FBI computers.

Only last year did I finally learn from a series of Wall Street Journal articles how the FBI had spent years investigating what it deemed to be suspicious activity in lock-ups. In 2011, it had installed a hidden camera in the room where the U.S. Labor Department holds its media briefing sessions, the Journal reported. And that same year, the SEC had also subpoenaed computer hard drives used by Need To Know News’s reporters.

None of this led to any criminal charges being laid although the suspicions did eventually cause the Department of Labor to commission the dramatically named Clean Sweep Red Team Report, from Sandia National Laboratories. As a result of this investigation, the DOL announced in spring of 2012 that it would overhaul procedures for its lock-ups and that all media participants would have to reapply for permission to attend. In May, it said three previously accredited news agencies would no longer be eligible to file from lock-ups because they were not considered to be “primarily journalistic enterprises” that disseminate original news to a “broad public audience.” Those given the boot were NTKN, the Bond Buyer and RTT News, which had briefly employed CEP’s old marketing director. The agencies did, however, remain eligible to participate in a variety of other government lock-ups.

At about the same time as Clean Sweep Red, Statistics Canada proposed changes that would slow things down in the lock-ups it oversaw. It announced that it would delay its releases to the public by as much as 16 seconds as part of a new data-loading process onto its website. Given that 16 seconds is a veritable lifetime in a world where milliseconds can mean millions of dollars of profits, there was immediate pushback.

Since the arrival of the strange news agencies, the big three financial data providers had caught up and were now also offering clients the direct machine readable feeds that used to be exclusive to their smaller rivals. According to Thomson Reuters, “strenuous representations” were made to both StatsCan and then Industry Minister Christian Paradis, arguing that such a change could cause chaos on financial markets. Within two days Statscan had backed down and agreed to hold consultations. Although spokeswoman Gabrielle Beaudoin said in October 2012 that a decision would be forthcoming very soon, the situation remains unresolved to this day.

Without understanding how lock-ups have evolved to become a crucial part of HFT infrastructure, it’s difficult to appreciate how complex it is to make any changes to them. When there was a fuss last year over possible leaks from a U.S. Federal Reserve lock-up, Google’s executive chairman Eric Schmidt opined that the institution of lock-ups was obsolete and that it made much more sense just to release data on the web. But take away the lock-up with all the special fibre optic lines — and, more recently, microwave networks — leading out of it and the financial industry would be back to looking at numbers on a screen and pushing old fashioned buttons.

Michael Lewis’s  Flash Boys ends in the wilds of Pennsylvania at the foot of a microwave tower, the latest frontier in the race for speed. It was not unfamiliar territory to me as I had learned about how microwave networks were 30% faster than the most sophisticated landlines last summer when it came to my attention that Vigilant Global, now owned by the Chicago trading firm DRW, had applied for permits to build wireless networks in both North America and Europe.

In England, Vigilant had stated in a position paper, that the failure to create such a network could result in job losses in London’s important financial industry. But such arguments failed to convince city councillours in Castle Point, Essex who voted against the Montreal company’s request to put two satellite dishes atop a local water tower. “I don’t understand why every two or three months we are getting applications for more equipment on this building, “ Norman Smith, a Tory councillor , told the local newspaper.“I am happy to approve applications to replace existing, tired equipment but not more. Enough is enough.”

Postscript: I am working to add links to this story, but wanted to get it out asap.