This blog protocolls the latest news and updates to our struggle to bring one of the largest scam websites on the UK internet down.

We are database professionals in London who do data analysis and data mining as daily job.

A time ago we have set up a monitoring solution to monitor all publicly available activity on MadBid.

We protocolled all bids, usernames bidding, auction parameters and site failures in a Microsoft SQL Server database, around every 0.5 seconds, over a couple of days. The data is enough to give a precise picture on what happens on MadBid.

We also protocolled the timing of the auctions, which is key in understanding how MadBid scams and why we must WARN against it in the strongest terms.

After professional analyzing the data we found, here are the results of our findings.

There is no way you win a larger value auction by bidding, the winner is deliberately selected by the MadBid system.

The system will stop accepting bids and select a "winner".

There is a very very small chance that you are the deliberately selected "winner".

The primary hints that this is about to happen are:
the auction time slots go down from 30 sec to for example 5 sec
many different people are bidding almost to the same time shortly before the auction closes

We have hard evidence on many many auctions that bids are ignored by the system from a specific point in time, a few secondes before the winner is selected by MadBid and the auction closes.

Now, this could explain the phrase "the highest bidder" wins. If the MadBid system chooses to stop an auction, maybe the MadBid system selects the "highest bidder" in a list of recent bidders. We have found no evidence how this list could be sorted hence who could be expected to be the "highest bidder".

Here are reasons for MadBid to stop an auction deliberately even if many people still bid.

a) The revenue is enough to pay the item auctioned and to have a big profit.

b) The main MadBid marketing tagline is the claim that stuff is auctioned away by around 85% under retail price. If they would let the auctions run they would not achieve this since people would continuously bid. It is thinkable that the auction price would even be near to the retail price if always new people start bidding - they have not paid much in bids so far and would get the item still under retail price.

c) The auctions would run a longer time. It is more interesting for people to participate in short auctions.

Call for lawyers

If you are a good lawyer and see chances for some or all scammed bidders who believed in the "terms an conditions" of MadBid.com, who are clearly breached by this company, and given the fact that we have the hard evidence about this, please contact us on This email address is being protected from spambots. You need JavaScript enabled to view it.

Thanks for reading. Please feel free to comment.

The madbidisscam team.

Disclaimer
*** of course we have had no connection to madbid whatsoever, and given the fact that some former Goldman Sachs guy is running their finances, we have no wishes to change that, so MadBid paid internet trolls, keep away ! ***

For all the talk about how High Frequency Trading has rigged markets, most seem to be ignoring the two most obvious questions: why now and what happens next?

After all, Zero Hedge may have been ahead of the curve in exposing the parasitism of HFT (anyone who still doesn't get it should read the following primer in two parts from Credit Suisse), but we were hardly alone and over the years many others joined along to expose what is clear market manipulation aided and abeted by not only the exchanges but by the regulators themselves who passed Reg NMS - the regulation that ushered in today's fragmented and broken market - with much fanfare nearly a decade ago. And yet, it took over five years before our heretical view would become mainstream canon.

One logical explanation is the dramatic and sudden about face by none other than Goldman Sachs, which from one of the biggest proponents of quant trading strategies including algo trading, and which used to make a killing courtesy of HFT (who can possibly forget Goldman's charges against Sergey Aleynikov's code theft which alleged "there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways"), has in recent weeks unleashed a de facto war on HFT, first with the Gary Cohn HFT-bashing op-ed, and then with the implicit backing of the IEX pseudo dark pool exchange, whose employee just mysteriously also is the protagonist of the Michael Lewis book that has raised the issue of HFT to a fever pitch.

So does Goldman know something the rest of us don't that it is now ready to give up on the HFT goldmine which lost money on just one day in 1238? Why of course it does. And one would imagine that judging by the dramatic turnaround exhibited by Goldman that said something is very adverse to the ongoing future profitability of the HFT industry. The amusement factor only rises by several notches when one considers that Goldman also happens to be lead underwriter on the Virtu IPO offering: one wonders what they uncovered and/or what they know about the industry that nobody else does, and just how the VRTU IPO will fare now that Goldman is so openly against HFT.