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