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Schumer Letter To Mary Shapiro

Tyler Durden's picture




 

"I write out of concern that the integrity of our capital markets is being compromised by the ability of some insiders to view order information before it is available to the entire market, and use electronic trading strategies to profit from that information at the expense of other investors."

Full letter here:

Schumer Letter

 

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Mon, 07/27/2009 - 13:32 | 15981 Anonymous
Anonymous's picture

excellent...i'm grateful this crap is finally getting some attention. how the fck could this technology whereby certain martket participants get to see orders for half a second before everyone else have been permitted in the 1st place? it just goes to show what a sh!tty job the SEC does. lord knows they will probably sit on this one for months before any action is taken. i like how Chuck says "please contact my intern" at the end...

Mon, 07/27/2009 - 13:33 | 15983 Anonymous
Anonymous's picture

Dear Chairman Shapiro:

I write today out of concern that the integrity of our capital markets is being compromised and that none of the SEC's staff could find their own arse even if both hands were free. I respectfully request........

Mon, 07/27/2009 - 13:35 | 15985 Anonymous
Anonymous's picture

SEC = SCREW EVERYONE COMPANY

Mon, 07/27/2009 - 18:15 | 16231 Alexander Supertramp
Alexander Supertramp's picture

SEC = SERIOUSLY EFFECTUAL CRAP as it relates to your post.  Great work both Durden and Schumer, as well as any SEC employee with a conscience and a sharp stick.  We're due for a few people in "leadership" to step out of the shadows and do what's right.  Thanks for confirming it won't be you.

Mon, 07/27/2009 - 13:36 | 15986 Anonymous
Anonymous's picture

I am happy Mr Schumer is making this effort. I am a former investor who would like to put money into the markets, except for the fact they are crooked at this time and I don't want to make a donation to the GS bonus fund.

In truth, the SEC doesn't care about the average investor any more. Nothing will happen as a result of this letter. Even if Mr Schumer introduces legislation, it will be stonewalled, neutered, and take years to pass.

Mon, 07/27/2009 - 13:43 | 15989 Eagle
Eagle's picture

"Nothing will happen as a result of this letter. "

No... Chuckie will get a nice fat campaign donation from GS and the matter will go off to never-never land, proving that letters do work.


Mon, 07/27/2009 - 14:44 | 16025 Gabriel Gray
Gabriel Gray's picture

Been soliciting any prostitutes lately Chucky?

Mon, 07/27/2009 - 13:41 | 15988 Anonymous
Anonymous's picture

Fantastic, at least someone is doing something.
Completely ridiculous that those with super computers should get a sneak preview.
Markets are rigged as long as this is going on.

Mon, 07/27/2009 - 13:46 | 15990 chumbawamba
chumbawamba's picture

Charles Schumer = Biggest Douchebayg on Planet Earth.

Q: Where is the most dangerous place to be in New York?

A: Between Chuck Schumer and a camera.

I am Chumbawamba.

Mon, 07/27/2009 - 13:53 | 15994 EQ
EQ's picture

Schumer might be a douchebag but at least this is finally getting some exposure.  In the end, the publicity of more possible fraud and corruption is more important than if this is fixed.  It really doesn't matter because this is simply shooting the fly on the elephant's ass.  The markets are going to tank again regardless of whether this is resolved.  The bigger issue is banning financial complexity and getting back to an economy that actually works for the people of this country.  That hasn't been the case for a long, long time.

 

I am not Chumbawamba. 

Mon, 07/27/2009 - 15:06 | 16055 Anonymous
Anonymous's picture

That also applys to washington. And I think that initial comment is too kind to chuck "the earmark" schumer.

Mon, 07/27/2009 - 13:48 | 15991 Anonymous
Anonymous's picture

did he not get the memo? Where are all the happy financial figures going to come from if you wall off the feed trough?

Mon, 07/27/2009 - 13:51 | 15992 Shamwow
Shamwow's picture

NYSE's Leibowitz talking about HFT on CNBC right now re: flash trading

Mon, 07/27/2009 - 14:03 | 15996 Anonymous
Anonymous's picture

the problem is being massaged into the memory hole.
is there any integrity left in the markets, and how does going to the sec demonstrate integrity.

if insanity is doing the same thing over and over again and expecting a different result, schumer just signed off his admission to an asylum.

Mon, 07/27/2009 - 14:07 | 15998 Danz Gambit
Danz Gambit's picture

Applauding Chuck Schumer, really?

You might want to take a closer look at this man's body of work as an elected official.

Mon, 07/27/2009 - 14:11 | 16000 JohnKing
JohnKing's picture

No mention of SLP, so Goldman effectively wipes the competion via regulatory capture again.

Mon, 07/27/2009 - 14:30 | 16011 Anonymous
Anonymous's picture

I agree with Schumer, and I can't believe this guy's leading the charge. And to think, I've never voted for a Democrat in my life!

Mon, 07/27/2009 - 15:01 | 16051 Anonymous
Anonymous's picture

I REALLY don't get where the unfair advantage lies... According to Nasdaq, if I try to lift an offer of 10.20, for example, and I opt to use a flash order with a limit of 10.20, they will first try to sweep their own book up to 10.20, then they will flash me on their own totalview book feed without disseminating me on the NBBO, at 10.19 for 20-30 ms. At that point if I am still not filled, they will route me to an away market that is showing a 10.20 or better offer if one exists. Finally, if I missed the 10.20s at an away market, they will publicly post me at 10.20 on nasdaq.

I OPT IN to use a flash order. Why would I opt to do so if it's going to put me at a disadvantage? A: it doesn't put me at a disadvantage.

OK, so *why* would I use such an order? The answer has to do with adding and removing liquidity. If I were to use a non-flashing order, I would just be routed to the away market and get 10.20s and Nasdaq would charge me $0.0026 per share. Using a flash order, if someone hits me during the 20-30ms flash period, I get a $0.0010 per share REBATE.

Where is the front-running opportunity here? Assuming it's there, if I thought I was a victim of systematic front-running. I would simply use a non-flashing order type by NOT ACTIVELY CHOOSING TO USE A FLASH ORDER.

Mon, 07/27/2009 - 21:17 | 16351 Anonymous
Anonymous's picture

Umm...I don't know sht about flash orders beyond what's been provided by ZH however, it sounds like this person above DOES. Any reason why nobody's responding to this to refute it and/or point our errors? Or, is it just so blatant that it doesn't deserve a response? If flash orders act in the manner in which is described above, where is the problem?

BTW, those who have already pointed it our are correct - Chuck Schumer is a BFDBag. Remember this classic line regarding the 'economy saving stimulus(spending)' bill?

http://www.youtube.com/watch?v=JEfICUoWKBw

Makes me sick. So out of touch...

Tue, 07/28/2009 - 10:54 | 16846 Anonymous
Anonymous's picture

Nobody wants to do the research and understand what these things actually are and what they mean. It's much more fun to blame the man and get outraged, right? Anyway, if you want to do a little legwork, all the information is publicly available. Check out:

http://directedge.com/docs/20090603Direct_Edge_SEC_Comment.pdf

http://www.batstrading.com/resources/features/bats_exchange_BOLT.pdf

http://www.nasdaqtrader.com/TraderNews.aspx?id=ETA2009-35

http://www.nasdaqtrader.com/content/ProductsServices/Trading/Flash_facts...

Don't just take things at face value because someone on a blog OR EVEN SOMEONE PUBLISHED IN THE NEW YORK TIMES says it.

Mon, 07/27/2009 - 15:18 | 16074 Anonymous
Anonymous's picture

did schumer sign this with a marker from his coloring set?

Mon, 07/27/2009 - 15:21 | 16080 thetechnicaltake
thetechnicaltake's picture

The only way to take HFT and things like this off the table is to take the profits out; if there is no money to made, then people wouldn't do it.

You could tax this kind of money making enterprise very nicely.

Mon, 07/27/2009 - 16:01 | 16123 Anonymous
Anonymous's picture

Yeah, let's kill capitalism while we're at it. Good plan.

Mon, 07/27/2009 - 16:22 | 16145 thetechnicaltake
thetechnicaltake's picture

this isn't capitalism....it is cheating; it serves little if any purpose

 

 

Mon, 07/27/2009 - 15:55 | 16119 agrotera
agrotera's picture

He didn't use a word appropriate to the the situation when he wrote "curb" this practice.  That sounds weak, and it also implies that the practice just needs to be decreased...

unfortunate

Mon, 07/27/2009 - 16:04 | 16125 Anonymous
Anonymous's picture

He's just parroting the NYSE's complaint to the SEC which is biased. Go read Direct Edge's response letter.

Mon, 07/27/2009 - 17:08 | 16172 Anonymous
Anonymous's picture

What an excellent piece, huh.

Mon, 07/27/2009 - 21:47 | 16382 Anonymous
Anonymous's picture

This has nothing to do with 'the average investor' - it has everything to do with ALL investors (be they banks, pension funds, hedge funds or retail investors) being able to see and react to available orders and prices TOGETHER and at the same time, i.e. a LEVEL PLAYING FIELD.

DavidC

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