According to HufffPo, The Securities and Exchange Commission
is investigating charges that the New York Stock Exchange, Nasdaq and other
major exchanges routinely give special preference to high-speed traders,
letting them trade ahead of normal, slow-moving shlubs, report Scott Patterson
and Jenny Strasburg of the Wall Street Journal. The report comes a week after
the SEC fined NYSE for giving data to some high-speed traders before releasing
it to the public. That case involved a mere $5 million fine, but it was
apparently just the tip of the robot iceberg.
So what? Who cares? say proponents of high-speed trading.
This is the future, and puny humans need to get the hell out of the way. The
problem with just letting the robots take over all of our stock trading -- and
they now control two-thirds of it, Patterson and Strasburg note -- is that it
leaves us increasingly vulnerable to blowups like the Flash Crash, the botched
Facebook IPO and the Knight Capital trading debacle. And it erodes public
confidence in stock markets, which has fallen to a new low, according to a
recent survey by the TABB Group. Meanwhile, investors are pulling money out of
stock-market mutual funds….
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