Clarification From Charles Schumer On Flash Ban

Tyler Durden's picture

U.S. Senator Charles E. Schumer (D-NY) released the following statement regarding SEC Chairman Mary Schapiro’s confirmation that she is seeking action on “flash trades,” pending the full Commission’s approval and a public comment period:

"We of course expect the SEC to follow its procedures for the implementation of this new rule, but there is every expectation the Commission will vote for it. The bottom line is, this practice will be eliminated."

--Senator Charles E. Schumer

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Anonymous's picture

Mr Schumer, Mary...."toxic liquidity/dark pools" have cured a symptom about the disease?

Veteran's picture

Crime is the disease


Cobretti, I mean ZH, is the cure


Sorry, couldn't resist

Anonymous's picture

Flash trades have little, if any, relation to "toxic liquidity/dark pools"

erich's picture

You are killing the mood!  There is a CONSPIRACY here, run with it!

MinnesotaNice's picture

I really wish the SEC could do some original investigative work themselves that leads to a change in regulation that they initiate... rather than simply reacting to what is put before them... they certainly are not a dynamic, nor especially intelligent organization... they seem to spend the majority of their time out-maneuvered by someone or something.

Anonymous's picture

Pending approval and public comment period.

And what about in the meantime?

They can ban shorting in an instant but not this?

D.O.D.'s picture

Your Shorts!!! Bring out your shorts!!!

cougar_w's picture

Old Day Trader: "I'm not short."

The FED: "Err... he says he's not short."

Goldman Sachs: "Well, he will be soon."

Old Day Trader: "I'm feeling long SPY."

GS: "No you're not, you'll be stone short in a moment."

The FED: "Well, I can't take him like that. It's against regulations"

Old Day Trader: "I don't want to go all-in cash."

GS: "Oh, don't be such a baby."

The FED: "I can't take him."

GS: "Oh, do me a favor."

Old Day Trader: "I think I'll go long in PM."

GS to Old Day Trader: "You're not fooling anyone, you know."

Old Day Trader: " I feel happy. I feel happy."

The FED hits Old Day Trader with a an abrupt change in monetary policy.

GS: "Ah, thank you very much."

The FED: "Not at all. See you on Thursday."

GS: "Right."

Dr. Kenneth Noisewater's picture

That must be Lloyd Blankfein?

How'd you know that?

He hasn't got shit all over him!

GoldmanSux's picture

Plus, I would like to know who approved it, and what procedures/methodologies/hearings were used. If they approved it without the above, they can eliminate it today.

peterpeter's picture

Feel free to peruse and do a search.  This did not just happen one day...

. . .'s picture

True, but the SEC did put Goldman's SLP program in place effective immediately without a notice and comment period.  If Goldman gets guidance ASAP, why shouldn't Senator Chucky S?

. . .'s picture

Very true.  If the SEC feels it is appropriate, they can issue temporary guidance that is effectively immediately without a notice and comment period.  Along with a proposal of the identical rule as final guidance, that becomes effective after the notice and comment period and hearing (if any).

Cheeky Bastard's picture

This is nothing more than a fucking game show for the general public ... They know they are gonna lose in the next elections, and they know that they have to do something to remain in W.DC ... i don't believe nothing they say, and the latest game that is being played is the one between Rahm, Issa and the dude from Arizona ... and the SEC will " vote " on this as long as they can so they present themselves to the public as if they actually have some power ...

Anonymous's picture

Mary is fronting for her masters. Make no mistake,
the brokers(government sax) that pay her, however indirectly, control her actions. She's a liar.

Anonymous's picture

so now the russian hedge funds and the Antiguan hedge funds and the israeli hedge funds can now relax and not worry about front running by the goldman sachs squid. there is no honor among thieves. thank you chuckie for looking out for your boys.....

Cheeky Bastard's picture

Goldman couldn't care less about banning this stuff ... they are already focused on their next scheme ... Climate exchange and trading carbon credit .... they have been setting the grounds based on blatantly un-true fairy tale of global warming since mid-90s ... and to them that cash cow is worth app. 2 trillion a year so they don't even break a sweat about this ...

. . .'s picture

Goldman has bipartisan support for their carbon emmisisons trading, for example Senators Boxer and Ensign.

It is a strange world we live in when the people fighting GS' carbon trading are regarded as extreme left (Dorgan and Sanders) or extreme right (demint and inhofe).

Cheeky Bastard's picture

that's the kind of game they play ... since they have no valid argumentation to support global warming, they discredit and marginalize the people who oppose them with name calling and funding their political opponents when the election time comes ..

ZerOhead's picture

Finally something I know something about. Thirty years of global satellite temperature measurements and EXACTLY .001 degree C. warming to June of 2009. Remember these multi-million dollar thermometers have been flying since before global warming was an issue. Meanwhile Hansen at NASA GISS still measures temperatures in parking lots and actually adjust these temperatures up further. Google UAH MSU Global Temperature Anomally June 2009 if you don't believe a stupid cat!!

Anonymous's picture

Since ground meteorology stations went electric they have been placed mainly near building, on rooves and many are near car parks. The heat island effect is real. Plus places that have been irrigated that were dry are now heat sinks and show up warmer. The data is dodgy but debate is frowned upon.

buzzsaw99's picture

Piss on Schumer. GS already made their nut this year. Schapiro is Goldman's bitch.

Anonymous's picture

What good does it do to fine the present stockholders? The fines should go to the people who pulled this crap.

Anonymous's picture

Still avoiding the question of whether it was illegal in the first place. - Pitchforks

Anonymous's picture

You might also want to look into the regulation that prevents US indices from ending the day in the negative. This is *^%@%# unreal!

Anonymous's picture



--"Steal from the Taxpaying Masses, just don't show them what you are spending it on"....Suck it up and fly commercial until this thing blows over and we have taken over the country...

Anonymous's picture

did HAL / WOPR wake up 15 minutes prior to market close?

jdoo's picture

Tried to find a post where this comment may be more relevant but I failed.

Can anyone explain what the hell is going on with GGC?

Based on my read these shares should be nearly worthless, not +250% from 5days ago close....

Anonymous's picture

How can I find out about those moves in advance. I'm trying to get in on risk-free money by the boatload.

mule65's picture

15% shares short = squeeze.

Anonymous's picture

Their earnings were supposed to be released an hour ago but I can't find... Guess someone got word they're still solvent?

Gilgamesh's picture

They restructured debt and amended credit agreements last week.  So, no BK - at least in August.  And you're left with no more stock sellers, and lots of shorts to cover/bought-in.

Anonymous's picture

Public comment is hereby solicited as to whether front-running and officially sponsored theft on a colossal scale should be impeded. Somewhat. Temporarily.

Comrade de Chaos's picture

well, check this out:

" Aug. 4 (Bloomberg) -- American International Group Inc., the insurer rescued by the U.S. government, will release second- quarter results without a conference call this week as Chief Executive Officer Edward Liddy prepares to step down."

Anonymous's picture

Seems we can't stop Chucky Schumer's mouth from front running.

Don't get me wrong, flash trading should totally be banned it's just that this blowhard's prematured exclamations are not helpful.

Anonymous's picture

$4 MIL -> $0 < 1 YEAR.
Gotta feel kinda sorry for the determined shorts who blow up...

"I shorted 500 ES contracts at 1003.75 today. Possible target is around 935. This is more like a short term trade and the only opportunity I have to recover, as I expect this move to happen in days."

Anonymous's picture

Turned $350K into $4 mil in six months. Turned $4 mil into 0 in about 5 months.

Greed is not good.

Nice job...

Anonymous's picture

July 15: Denial
July 20: Anger
July 27: Bargaining
July 31: Depression
August 3: Acceptance

Comrade de Chaos's picture

September 3: Truth

October 3: Survival

January 3: Triumph

p.s. I doubt it's a diligent practice to evaluate returns on bi-weekly bases.

Anonymous's picture

Touché Comrade, persist in your ass-kicking ways.

Anonymous's picture

Tyler, would you be interested in what Irene has to say?

“Unfortunately, flash trading gives a bad name to high- frequency trading,” said Irene Aldridge, author of “High- Frequency Trading: A Practical Guide to Algorithmic Strategies and Trading Systems.” “Most high-frequency trading has nothing to do with flash orders, so it’s going to continue as business as usual.”

Anonymous's picture

Tyler D,

Good work on this one. I think you are the real reason why this issue even came about in the first place. I don't usually post here but I thought I'd come by and say good work. Just shows how successful your blog has become.


KOZ's picture

This sounds a lot like it is coming from someone running for reelection very soon....


"We of course expect the SEC to follow its procedures for the implementation of this new rule, but there is every expectation the Commission will vote for it. The bottom line is, this practice will be eliminated."

--Senator Charles E. Schumer



"We of course expect the SEC to follow its procedures for the implementation of this new rule, but there is every expectation the Commission will vote for it. The bottom line is, this practice will be eliminated."

--Senator Charles E. Schumer

D.O.D.'s picture

Hello.... if anyone is reading...

The M$M keeps referring to Flash Trading as a "sub-set" of HFTPs, but I would argue the correct phrase would be, Flash Trading is a function, among thousands of funtions, of an HFTP. 

Please correct me if I am misunderstanding something...

Cheeky Bastard's picture

nope, you got that right, its just one of components of HFT, but nevertheless, a significant one ...

D.O.D.'s picture

stupid lag....