This page has been archived and commenting is disabled.

FINRA Chief of Enforcement Compares HFT To Buying First Class Plane Tickets

CalibratedConfidence's picture




 

No surprise here as the Chief of Enforcement over at FINRA, one J. Bradley Bennett offers a glowing example of the clueless nature that runs to the top of our supposed financial market regulating entities.  The complex nature of the ecosystem that has ensnared our exchanges thanks to the HFT lobby is heavily misunderstood at the top echelon of FINRA's enforcement division.  This horrible connection of HFT to First Class passengers exemplifies that:

[J. Bradley Bennett]...compared high frequency trading to buying a first-class ticket on an airline, saying these passengers are paying for the benefit of getting on and off the plane first. “Is there anything unfair about that? Doesn’t sound like it to me.”

He also goes on to point out the "obvious" fact that HFT has been in the news, clearly missing the whistle-blowing by Haim Bodek.  Even 10 Downing was asking Nanex questions over 2 years ago as they were clearly curious what was happening in financial markets.  Just what has FINRA been up to aside from making sure minor infractions prevent people from trading for FINRA registered brokerages lest our financial markets lose their integrity?

 

 

Via WealthManagement:

Benefitting [sic] from faster access to the markets is akin to buying a first-class plane ticket, and “doesn’t sound unfair,” said the top cop at Wall Street regulator FINRA.

 

Speaking on a panel at a conference sponsored by the Practicing Law
Institute Friday in New York, J. Bradley Bennett, the chief of
enforcement at FINRA, was reacting to a question on high-frequency
trading and a discussion of Michael Lewis’ recent book Flash Boys.

 

Bennett was on a panel with the enforcement heads of the SEC, the Consumer Financial Protection Bureau and the Dept. of Justice.

 

Bennett pointed out the focus of Lewis’ book was on the possible
preferential access these traders have and that “their pipes may be
faster."

 

He compared high frequency trading to buying a first-class ticket on
an airline, saying these passengers are paying for the benefit of
getting on and off the plane first. “Is there anything unfair about
that? Doesn’t sound like it to me.”

 

Bennett also noted that the entire market structure has shifted
dramatically. Post World War II, a stock was held, on average, for 4
years. Last year, that dropped to 2.8 seconds, he said.

 

Bennett spent two decades as an attorney defending financial advisors [sic]
and financial services companies before joining Wall Street’s
regulatory agency in 2011. He oversees a staff of some 300.

 

FINRA identified HFT as a regulatory priority in 2014, focusing on
“abusive algorithms” that threatened the integrity of the market. But
some critics go further, and claim faster access to the exchanges as
well as receiving priority data feeds lets these firms act on
information faster than others, which is akin to front running.

 

“Obviously it’s been a topic in the news,” SEC’s head of enforcement
Andrew Ceresney told attendees. “It’s an area we’ve been focused on for a
period of time,” he added, noting the SEC has several ongoing cases
around high-frequency trading.

 

There's your private SRO at work for you 'Murica

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sun, 04/27/2014 - 19:45 | 4702271 Larry Doyle
Larry Doyle's picture

I have spent the better part of the last 5 years investigating and exposing Wall Street's SRO FINRA. I have blogged often about this organization at my site, Sense on Cents. 

Some may recall that on February 4, 2009, Madoff whistleblower Harry Markopolos stated in a Congressional hearing that FINRA was "in bed with the industry and deserving of an A+ in corruption."

I have written a book that outlines much of the corruptible practices within FINRA specifically and the financial regulatory system at large. I detail insider trading, kangaroo courts, lying, misappropriation of funds, sham investor protection, whistleblower abuses and more.

The title of my book? 

In Bed with Wall Street: The Conspiracy Crippling Our Global Economy (January 2014, Palgrave Macmillan) 

 http://www.amazon.com/Bed-Wall-Street-Conspiracy-Crippling/dp/1137278722...

TRANSPARENCY IS THE GREAT DISINFECTANT 

Sun, 04/27/2014 - 03:09 | 4700567 Kevin
Kevin's picture

It's not even close to being like buying a first-class ticket in the way he's described. A more accurate airline ticket analogy would be: 

It's like buying a coach-class ticket - that you never actually wanted. You only bought it because you were allowed to see that someone else had recently pressed the 'BUY' button on an online order form to buy the same ticket. But before that transaction was complete, you were allowed to sell the same ticket that you had just bought a nano-second before to him at a higher price.    

A first-class ticket buyer just pays for better service. He doesn't get to see how much anyone else 'actually' paid for their ticket nor does he get to intercept anyone else's transactions. 

He also does not reach the destination runway any quicker. He only gets on and off the plane sooner. In trading terms, that equates to paying to be able to place orders directly and quicker - which still does NOT have an impact of 'guaranteeing' that someone else's price will be adversely affected and 'guarantee' a risk- free profit for the trader (or first class ticket buyer).

Sun, 04/27/2014 - 01:34 | 4700488 dunce
dunce's picture

People often use analogies because they donot want to dicuss the actual facts. The truth is often incovenient.

Sun, 04/27/2014 - 01:03 | 4700462 damicol
damicol's picture

This is fantastic news,

Do not be negative on this.

Consider this, and in fact I have written the following email to Linda Feinberg at FINRA.

The opportunity.

Dear Linda,

As you apparently consider that HFT is now the equivalent of a first class air ticket  I assume that you will apply the same logic to our proposal.

We have a created a website whereby   market sensitive information can be sent anonymously.

 We do not solicit this information, but we do prepare this information, provide by our anonymous sources in order that it can be made available on our website and sent by email alert to our subscribers.

Thus guaranteeing that the information is released in the public domain and available to anyone checking updates on our website simultaneously

Using our proprietary algorithms we create a delay in receiving the information and releasing this information both to our subscribers and publicly on our website simultaneously.

These delays could be from slightly under one minute to several hours but ensure that the previously private market sensitive information is now in the public domain at one precise moment in time.

Membership, in order  to be on the mailing list, is unfortunately limited and includes  free passes for certain categories or individuals that we deem to be in the public interest to recieve free services from ourselves.

Consequently we consider that by this method, we can now now address the inherent advantages of someone buying first class tickets, by allowing others to also buy first class tickets, albeit on a different plane.

We trust that you concur absolutely with our reading of your position.

Regrettably we cannot disclose details of our website at this time as this is privileged confidential information, and this is for your security and ours.

Our website is operated off-shore and therefore jurisdictional matters are outside the remit of the intended response this inquiry is engendering.

 

Kind Regards

The Inside Group Inc

 

 

I will keep you updated on the response but meanwhile suggest as many as possible set up similar websites and encourage those with inside info to send it anonymously, knowing that you too can now provide first class tickets to your friends

PS dont forget to ask Linda

http://www.finra.org/arbitrationandmediation/contacts/

Sun, 04/27/2014 - 00:21 | 4700402 MrBoompi
MrBoompi's picture

Exactly right! HFT is exactly like first class plane tickets, where you get to board first then pickpocket cash from everybody passing by on their way to the back of the plane.

Sat, 04/26/2014 - 20:11 | 4699935 Emergency Ward
Emergency Ward's picture

If Bradleeey believes that, I say don't try to occupy my coach seat when I get up to go to the restroom.  FINRA Enforcement Chief, what a fucking joke.

Sat, 04/26/2014 - 21:26 | 4700126 MontgomeryScott
MontgomeryScott's picture

Benefitting [sic] from faster access to the markets is akin to buying a first-class plane ticket, and “doesn’t sound unfair,” said the top cop at Wall Street regulator FINRA.

Bennett pointed out the focus of Lewis’ book was on the possible
preferential access these traders have and that “their pipes may be
faster."

You have to KNOW that this guy is an idiot! Senator Ted Stevens enlightened us as to the composition of the Internets, some years ago. IT'S A SERIES OF TUBES!

http://www.youtube.com/watch?v=_cZC67wXUTs

Bennett must be confusing the issue. PIPES are something you smoke from (or suck on). Tobacco-, Marijuana-, Crack-. Of course, Bennett is used to sucking on things, as one smokes a pole (or sucks a pipe). He LIKES smoking big fat fast poles (oops, I mean, pipes).YEAH, their pipes are faster. Water pipes, Huka pipes, SEWER pipes...

Speaking on a panel at a conference sponsored by the Practicing Law
Institute Friday in New York, J. Bradley Bennett, the chief of
enforcement at FINRA, was reacting to a question on high-frequency
trading and a discussion of Michael Lewis’ recent book Flash Boys.

He compared high frequency trading to buying a first-class ticket on
an airline, saying these passengers are paying for the benefit of
getting on and off the plane first. “Is there anything unfair about
that? Doesn’t sound like it to me.”

DAMN!

Silly faggot, Dicks are for CHICKS!

NO, NOTHING UNFAIR about intercepting Stock Trade Orders to brokers and driving up the price by pre-ordering nanoseconds before the intercepted orders can reach the confidential recipients; and then counter-offering to sell at a slightly higher price (since the one intercepting has just bought up ALL the available trades, and holds the only avenue of purchase).

FUCK BENNET! Oh, it seems that someone already has.

Now, let's see: WHO might THAT be?

Sat, 04/26/2014 - 21:37 | 4700142 MontgomeryScott
MontgomeryScott's picture

In case you don't know what a faggot looks like, I have provided a link, here.

http://www.linkedin.com/pub/j-bradley-bennett/9/53/a51

How does one become a queer? Well, after going to georgetown University law center, one must become a LIAR (oops, I mean, LAWYER).

  • Partner at Baker Botts LLP
  • Partner and Associate at Miller, Cassidy, Larocca & Lewin
  • Partner at Miller, Cassidy, Larroca & Lewin
Sat, 04/26/2014 - 21:46 | 4700159 MontgomeryScott
MontgomeryScott's picture

Now that he's SOMEONE, in the USGOV.INC (incorporated @1871) machine, his name seems to be 'J. Bradley' fucking BITCH, instead of his 'given' name (whatever the 'J' stands for). Punks like this always think that the usage of an initial, followed by their middle name (which wasn't intended to be used this way) somehow give them some type of 'faux royalty'. I'm actually SURPRISED that he didn't add 'COMMA, ESQUIRE', in his little faggot profile on LINKEDIN.

Sat, 04/26/2014 - 18:32 | 4699790 mumbo_jumbo
mumbo_jumbo's picture

actually it's more like buying all the first class tickets for the flight and having the whole first class cabin to yourself

Sat, 04/26/2014 - 17:12 | 4699607 Wannabee
Wannabee's picture

Taking his analogy further; I'm on the same flight, I like his seat better than mine, I bid a little more for his seat. He gets bumped to coach and no refund for the fare difference.

Sat, 04/26/2014 - 20:51 | 4700057 bunnyswanson
bunnyswanson's picture

Rather, just wait for him to go to the bathroom, sit in his first class seat, resume drinking his beverage and claim ownership of his briefcase and carry-on luggage.  When he returns and begins to protest that you are in his seat, tell him you do not know what the hell he is talking about. 

Sat, 04/26/2014 - 15:55 | 4699373 Everybodys All ...
Everybodys All American's picture

I can see it now ... the next US Treasury Secretary or perhaps a Fed governor. Following in a long line of liars

Sat, 04/26/2014 - 15:33 | 4699322 FredFlintstone
FredFlintstone's picture

J. Bradley Bennett

 

Executive Vice President, Enforcement

 

J. Bradley Bennett, Executive Vice President of Enforcement, joined FINRA in January 2011, and is responsible for overseeing FINRA's Department of Enforcement. In this capacity, Mr. Bennett directs investigating and bringing all formal FINRA disciplinary actions against firms and their associated persons for violations of FINRA rules and federal securities laws.

Previously, Mr. Bennett was a partner at the law firm Baker Botts in Washington, DC, where he specialized in financial and securities law violations. Before joining Baker Botts in 2001, he was an attorney at Miller, Cassidy, Larocca & Lewin.

Mr. Bennett started his career at the Securities and Exchange Commission as a senior attorney in the Division of Enforcement, with responsibility for cases covering all facets of securities law, including accounting, broker-dealer regulation, tender offers and insider trading.

Mr. Bennett serves as an adjunct professor of securities regulation at Catholic University's Columbus School of Law. He received his undergraduate degree from St. Lawrence University and his J.D. from Georgetown University Law Columbus School of Law. He received his undergraduate degree from St. Lawrence University and his J.D. from Georgetown University Law Center.

Sat, 04/26/2014 - 20:50 | 4699973 Emergency Ward
Emergency Ward's picture

Salary will be over 700K, predecessor made 1.3 million a year.  Great gig, Bradley.  You go, girl.

Sat, 04/26/2014 - 17:25 | 4699639 Conax
Conax's picture

Why, he sounds like the perfect choice for any regulatory position.

'Previously, Mr. Bennett was a partner at the law firm Baker Botts in Washington, DC, where he specialized in financial and securities law violations.'

There, he diligently studied how the perps screwed up and what got them caught.

He's also the best selling author of "Financial and Securities Law Violations for Dummies".

The man is beyond all value. 

Sat, 04/26/2014 - 14:52 | 4699257 g'kar
g'kar's picture

"Benefitting [sic] from faster access to the markets is akin to buying a first-class plane ticket, and “doesn’t sound unfair,” said the top cop at Wall Street regulator FINRA."

 

We know what airline he flys, the friendly skys of Banana Republic Airways.

Sat, 04/26/2014 - 22:12 | 4700220 MontgomeryScott
MontgomeryScott's picture

Historically, when one sits in the back of an aircraft, one is more likely to survive a disaster (Tenerife is an exception to this).

When I fly, I prefer to be in a seat by the window, overlooking the wing. It's the center of balance, and thus gives the smoothest ride. Also, I can watch the operation of the airfoils, so as to have predeliction of the motions of the aircraft that I am riding within. The wings also have much stronger landing gears than the nose; thus the chances of being killed by a hard landing are minimized to some extent; and when depleted of their fuel, they are the most bouyant part of the airframe (and have the highest number of 'emergency exits' as well).

Paying an extra $500.00 to be able to get on and off 'first' might be all right for those who are deluded in to thinking that they are superior (in some archane way) to others, I suppose.

PRE-BOARDING, B.R.A. flight 666. All first-class passengers, and those with 'special needs', please get on the fucking plane, RIGHT NOW!

Have you ever noticed that those in wheelchairs, those who are flying without parents, those who are otherwise handicapped, AND the 'First Class' all board at the SAME TIME?

'J. fucking BENNETT, please come to the Boarding Area. Your seat is waiting.'

 

Sun, 04/27/2014 - 16:49 | 4701809 g'kar
g'kar's picture

PRE-BOARDING, B.R.A. flight 666. All first-class passengers, and those with 'special needs', please get on the fucking plane, RIGHT NOW!

 

 

LOL

Sat, 04/26/2014 - 14:22 | 4699190 Marco
Marco's picture

"these passengers are paying for the benefit of getting on and off the plane first."

After an emergency landing ... after also paying to allow them to bypass bagage checks and causing the emergency landing due to excessive weight.

Sat, 04/26/2014 - 14:20 | 4699180 Lord Koos
Lord Koos's picture

It is the opinion of the ruling class that any advantage enjoyed by the ruling class, is fair.

Sat, 04/26/2014 - 18:34 | 4699796 mumbo_jumbo
mumbo_jumbo's picture

when plunder becomes a way of life for a group of men living in society....you know the rest.

Sat, 04/26/2014 - 13:52 | 4699115 Duc888
Duc888's picture

 

 

 

....I guess.   Hmmm, everyone else gets crammed into the shitter in the back of the plane.

Sat, 04/26/2014 - 17:52 | 4699715 kurt
kurt's picture

Why are we so stupid? The best thing we could do is declare that shit tastes like puddin'. Yum, yum! We have to learn our station in life, to stay there and appreciate what little we get, "thank you sir, may I have another" as they rap us smartly with their gold tip cane. "Thank you Guv'na, may I lick-spittle your shoe it has some of my blood on it."

Please sir could you flip us a bob or two for supporting you and your lovely wife. There, there now I like gutter food. Sour food tastes better once you puke it up and then swallow it down again. It's good enough for us! 

Thank you kind sir for bearing our humble and disgusting existence.

Sat, 04/26/2014 - 13:48 | 4699109 gmak
gmak's picture

If one wants to use the first class ticket analogy - actually HFT is more like finding out where all the other passengers on all planes want to fly, then buying up all the first class tickets where there is the most demand and selling them to those passengers at a higher price.

Sat, 04/26/2014 - 12:35 | 4698972 Lumberjack
Lumberjack's picture

I know a lot of people who would be very willing to give him a 'first class ticket'...

Sat, 04/26/2014 - 12:36 | 4698971 novictim
novictim's picture

If you believe in the "Free Market" then Bennett has this right.

And regulators love this free market philosophy because it lets them get paid for doing nothing.  'cause policing of the Stock Market means work and head aches and if you step on the wrong toes then you don't get that great job with Industry.

But only an idiot would REALLY believe that the market place is free or fair or that unfettered capitalism is a good thing.  Only an idiot would think that regulation and regulators are NOT good as a rule.

I'm curious to know what you Zero Hedge Libertarians think about all this.

Sun, 04/27/2014 - 10:07 | 4700912 Farqued Up
Farqued Up's picture

The problem is the controlled capitalism has no resemblance to free markets. Regulators are there to provide exclusionary favoritism to the insiders. Eliminate regulators and the people will not be constantly sucked down the false security trap.

Does anyone here on ZH actually believe that the FDA is saving more than they are killing? Watch the drug commercials and their warnings and the attendant class action vultures circling drumming up people to step forward. They should step forward. Is there anyone that thinks that he is being best served by a doctor that toes the FDA line of dogmatic protocols, even though their profession is called a practice?

The world would be much better off with no licensing, zoning, regulations, or even governments themselves except for cops, courts, jails, and insane hospitals. Any country that has rotted to the point of 3 million laws does not deserve to survive. Looks like it's going down faster than I had figured.

BTW, libertarians are not monolithic in their concepts of humanity and its relationships. Most libertarians are content to grant freedom to get freedom, the opposite of most religious fucked up fanatics. Trashy politician crooks give the fanatics a tidbit on people control and then fuck them and us to the wall.

Yes, I'm also a lib with an upper case L. I ran from the Republicans like the last goose in winter in 1988.

Sun, 04/27/2014 - 02:43 | 4700542 goldsansstandard
goldsansstandard's picture

The present system requires regulation.

Faux libertarians pretend that we have a free market financial system.

We do not. We have a crony system with fraud banking backed by violence.

Unfortunately, the licensed fraud of fractional reserve banking cannot be regulated due to the fact that the regulators are normal human beings constantly tempted by riches of the regulated.

When money was gold and redeemable receipts for gold, the mutual greed of bankers and public constantly presented the risk of mass redemption of the receipts, keeping the system largely honest.

Bankers who defaulted during a run, in the good old days sometimes got shot.

Unfortunately politicians like free money. so they found a way to not prosecute banking receipt fraud, and actually devised a system to maxomize it.

By allowing the bankers to issue more receipts than they had gold and collect interest on fraudulent receipts, the bankers and the corporations and people around them, over time got all the gold.

The dream of bit coin is that the system can be rebuilt with a totally hard currency. Yeah, the early adopters might get rich. But the unfairness ends there. There will not be endless counterfieting constantly benefitting the connected for centuries. Atleast that is the dream, and maybe will be the reality.

Sat, 04/26/2014 - 12:24 | 4698947 ThisIsBob
ThisIsBob's picture

Give the guy a break, he's just in it for the paycheck.  Even sluts have to eat.

Sat, 04/26/2014 - 11:59 | 4698885 Joebloinvestor
Joebloinvestor's picture

HAHAHA

What a moron.

No wonder HFT creams everyone else.

I know they are serious when Harry M. Markopolos is put in charge.

 

Sat, 04/26/2014 - 11:51 | 4698878 Seasmoke
Seasmoke's picture

Never believe a Tribesman, with two first names. NEVER !!!

Sat, 04/26/2014 - 11:34 | 4698842 Kina
Kina's picture

Banksters have a never ending supply of useful idiots to place in regulatory positions... to be followed by cushy high paying jobs that do nothing important.

Sat, 04/26/2014 - 11:14 | 4698808 Mediocritas
Mediocritas's picture

So I guess he missed the part where the first-on-board passengers picked the pockets of all the slower boarding passengers as they filed through.

Incompetent or corrupted.

Sat, 04/26/2014 - 13:24 | 4699059 Tenshin Headache
Tenshin Headache's picture

Exactly. Those first-class tickets are being paid for by the poor souls in coach.

Sat, 04/26/2014 - 10:55 | 4698784 RaceToTheBottom
RaceToTheBottom's picture

WS firms are getting good value for their investment.

WS will never get my money, pennies as it is.

Sat, 04/26/2014 - 10:41 | 4698749 raeb
raeb's picture

A more honest analogy would be to compare investing today to casino gambling.  The odds are clearly in the houses favor in both cases.  In many instances the casino odds are better.  A way to put an end to this--tax all short term gains at 90 percent and eliminate all long term capital gain taxes.

Sat, 04/26/2014 - 10:20 | 4698703 Blame Crash
Blame Crash's picture

There you go. Another blatant example of how corrupt and graft are baked into the American pie.

Sat, 04/26/2014 - 10:26 | 4698710 Ban KKiller
Ban KKiller's picture

Fascism is the term you are looking for.

Sat, 04/26/2014 - 09:58 | 4698679 aqualech
aqualech's picture

We just learned something about what the trading of stocks has evolved into.  It is no longer a process of learning a price (remember the newspaper?) and deciding to buy or sell something.  It is now about split-second gaming, by either becoming a middle-man or by using fake orders to slightly manipulate prices.  The regulaters understand and accept that the average hold time is 2 seconds and that investing is dead, and now you too know that that is what the marketplace has evolved into.  You buy and hold investors who EXPECT to have price transparency are ..... obsolete.  I wonder if the flash trader bots even use real money, as we humans understand it.

Sat, 04/26/2014 - 09:39 | 4698640 mccvilb
mccvilb's picture

FINRA used to be called the National Association of Securities Dealers, or the NASD. iT is a PRIVATE CORPORATION funded by Wall Street TO SELF-REGULATE WALL STREET. Need any more be said?

Sun, 04/27/2014 - 10:23 | 4700935 Farqued Up
Farqued Up's picture

Nothing more, thank you Republican, George Bush, for giving them more power over the legal corruption. Never fear they work hand in hand with the SEC. The SEC in at least one incident was the bloodhound for Bank of America.

Sat, 04/26/2014 - 09:19 | 4698615 Colonel Klink
Colonel Klink's picture

He looks like a classic member of the tribe, but a possible wannabe in this case.

Still a SCUM to the core with the comparison that it's like a first class ticket.

It's more like a bottom dealing cheat at a poker game.

Sat, 04/26/2014 - 16:32 | 4699483 lotsoffun
lotsoffun's picture

the tribe doesn't usually use the name 'bennett'.  i think he's a wannabe and that's why he was put out to float.

 

Sat, 04/26/2014 - 11:05 | 4698793 divingengineer
divingengineer's picture

My only question is how we are going to get this fucker to jump off his company's building?

Sat, 04/26/2014 - 11:43 | 4698858 Oreilly
Oreilly's picture

That or similar thoughts are going to be running thru most informed people's minds every time they have to listen to a Maiden Lane or Wall Street criminal lecture on the problems of the world.

The new slogan for bankster hiring:

 

"All the raping and pillaging of a normal bank, but with the added advantage that all our offices are only a single story high".

Sat, 04/26/2014 - 09:12 | 4698611 Turtle49
Turtle49's picture

From the bought and paid for management:  If the peasants in coach are unhappy -- tough shit.

Sat, 04/26/2014 - 09:08 | 4698605 bullet
bullet's picture

only one word... wow

Sat, 04/26/2014 - 09:05 | 4698604 kurt
kurt's picture

He like a asshole an shit.

Sat, 04/26/2014 - 09:02 | 4698597 Racer
Racer's picture

"Talking high-frequency trading, FINRA's Bennett says preferential access sounds like buying first-class tix, doesn't sound unfair to him"

Some animals are more equal than others  [G.O.]

Do NOT follow this link or you will be banned from the site!