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posted by LaminatorX on Wednesday April 30 2014, @01:04PM   Printer-friendly
from the The-House-Always-Wins dept.

US Securities and Exchange Commission Chair Mary Jo White told a US House of Representatives panel that she flatly rejected claims that retail investors are being fleeced by high-frequency traders who can use their speed to jump ahead with buy and sell orders that fetch better prices. "The markets are not rigged," says White. "The U.S. markets are the strongest and most reliable in the world." White's comments to the House Financial Services Committee mark the first time she has directly responded to allegations in Michael Lewis' new book "Flash Boys: A Wall Street Revolt" that high-speed traders are engaged in a form of front-running, in which the firms are able to quickly identify an investor's desire to buy a stock, rush to buy it first and then sell it back at a higher price. The SEC has been reviewing equity market structure issues, particularly following the May 6, 2010 flash crash incident when the Dow Jones Industrial Average sharply plunged before quickly rebounding. Although staff at SEC are considering whether to launch some pilot studies to test different regulatory proposals, there are no immediate plans to issue rules to crack down on high-speed trading or trading in unlit markets. "I want to be very clear that the market metrics suggest that the retail investor is very well-served by the current market structure."

 
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  • (Score: 3, Interesting) by Sir Garlon on Wednesday April 30 2014, @02:20PM

    by Sir Garlon (1264) on Wednesday April 30 2014, @02:20PM (#38115)

    Like many people, a big chunk of my assets are in mutual funds (I prefer index funds). I don't day-trade. So even though I do not pay the HFT tax on those individual trades I don't make, I pay through the gouging my mutual funds suffer when they trade.

    Therefore I question the SEC chairwoman's assertion that retail investors are well served. Does her definition of "retail investor" exclude mutal-fund shareholders? I would not be surprised if it did.

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    [Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
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