The Payoff: Why Wall Street Always Wins - An Excerpt

Tyler Durden's picture

Excerpts from THE PAYOFF: WHY WALL STREET ALWAYS WINS, By Jeff Connaughton


The Blob

In January 2009, Ted Kaufman was sworn in as a U.S. Senator, filling Joe Biden’s seat and saying immediately he wouldn’t run two years later in the special election. Kaufman never had to raise money to become a Senator or to stay there longer. For two years, he fought for average investors. THE PAYOFF: Why Wall Street Always Wins, written by Jeff Connaughton (Kaufman's chief of staff), tells how Kaufman and he took on Wall Street in Washington and had to fight “The Blob.”

The Blob (it’s really called that) refers to the government entities that regulate the finance industry—like the Banking Committee, Treasury Department, and SEC—and the army of Wall Street representatives and lobbyists that continuously surrounds and permeates them. The Blob moves together. Its members are in constant contact by e-mail and phone. They dine, drink, and take vacations together. Not surprisingly, they frequently intermarry.

Indeed, a good way to maximize your family income in DC is to specialize in financial issues and marry someone in The Blob. Ideally, you and your spouse take turns: One of you works for a bank, insurance company, or lobbying firm while the other works for a government entity that regulates, or enacts legislation for, the financial industry. Every few years, you reverse roles: “Sally Striver, staffer on the Senate Banking Committee,” so might read a typical notice in Roll Call, “today announced her departure to work for the Financial Services Roundtable”; inevitably, she’s replaced with someone from the financial industry because, so runs the justification, the committee needs people familiar with the issues. What you and your spouse do all the time is share information. After all, no lobbying restrictions yet promulgated can prevent pillow talk between Blob spouses.

Actually, marrying The Blob isn’t even necessary. A Blob member can simply take his or her non-Blob spouse to Blob parties—convivial gatherings of lobbyists and Wall street emissaries, SEC and Treasury Department officials—to help gather and disseminate intelligence. It’s a weekly, and sometimes nightly, occurrence in Washington. Ted and I quickly learned that, when you take on Wall Street in Washington, you take on The Blob.

*  * *

In August 2009, then Senator Kaufman wrote SEC Chairman Mary Schapiro to urge her to study how dramatic changes in our stock markets in only a few years time had led to an explosive growth in computerized trading.

Ted's letter to Chairman Schapiro helped draw the media's attention to dark pools and HFT, which began to receive extensive (and concerned) coverage in the financial press. The letter also transformed Ted from a virtually unknown Senate newcomer into a brightly flashing blip on Wall Street's radar screen. In response, Wall Street scrambled an entire air wing of bankers and lobbyists to buzz Capitol Hill. Soon, squadrons were swooping into our office, anxious to thwart new regulations following the financial crisis and, particularly, to prevent a crackdown on HFT. They were numerous (we typically met with five high-level Wall Street executives at a time) and unanimous. Whether a megabank, broker-dealer, or a hedge fund, they all said they believed that the stock market had never functioned better. "Competition has driven down the costs of trading," said one. "The spread between a stock's asking price and offer price has never been so narrow," said another. "There's always enough liquidity -- even during times of market stress -- to ensure that trades will almost certainly be executed," said a third. The refrain "mom-and-pop investors have never had it so good" was intoned by nearly all of them. As a former lobbyist, I almost had to admire the way they unswervingly stayed on message. And the message was that the status quo was good for everyone and that Ted and I were wasting our time exploring whether market changes might call for statutory and regulatory changes.

It would've been easy, and quite understandable, for us to be convinced by Wall Street's unanimous message. But we'd been educating ourselves about these issues and we were convinced that there were, to use Donald Rumsfeld's locution, too many unknown unknowns for us to stop burrowing for answers and prodding the SEC. Our chief burrower was Josh Goldstein, a twenty-two-year-old college graduate who'd deferred entry to Yale Law School for a year to come work for Ted. Josh is brainy, curious, and tireless. He spent all day, every day, immersing himself in the arcana of HFT, stock market structure, and regulation. He soon became so knowledgeable that his questions in meetings would elicit who-the-hell-is-this-kid looks from Wall Street lobbyists. We also had help from a few industry insiders (who worked with us on the condition that we never mention their names publicly), which suggested there was less unanimity than Wall Street wanted us to believe.

We learned about a range of trading strategies, some of which are beneficial to the average investor, but some of which are predatory and harmful. One HFT strategy is called pinging. It involves attempting to "uncover how much an investor is willing to pay -- or sell for -- by sending out a stream of probing quotes that are swiftly cancelled until they elicit a response. The traders then buy or short the targeted stock ahead of the investor, offering it to them a fraction of a second later for a tidy profit" (the Economist). Another HFT strategy is called quote-stuffing. It involves purposefully sending millions of orders to one trading venue to slow it down imperceptibly so that the trader can take advantage of time and price disparities at other trading venues. There are also momentum strategies (in which traders take a position in a stock and then use HFT to generate market momentum that would benefit their position) and liquidity-detection strategies (in which traders use HFT to front-run -- that is, buy or sell microseconds ahead of -- incoming orders from pension and mutual funds). An SEC staffer stated that in some instances these strategies "could be manipulation" and "would concern us."

The Tabb Group estimated in 2009 that HFT generates $8 billion in profits annually. The question is: How much of this profit is from legitimate practices that benefits all investors, and how much of it is effectively an illicit toll extorted from average investors without their knowledge?

* * *

Our top priority was to get the SEC to identify (or, to use the industry term: tag) high-frequency traders and collect data about their trades. Under current rules, such data weren’t collected. So it’s impossible to track an order as it wends its way—if “wend” can apply to a journey that takes a microsecond—through the electronic trading labyrinth and is executed. In fact, the entire reporting system for the execution of trades is antiquated. The SEC doesn’t even monitor brokers to ensure they execute trades fairly. Oversight in this area has been outsourced to the Financial Industry Regulatory Authority (FINRA), of which Schapiro was the chairman and CEO from 2006 to 2008. A self-regulatory organization for broker-dealers, FINRA has often been criticized for being lax in policing the industry and generous in compensating its executives (Schapiro’s regular compensation for 2008 was $3.5 million).

We met repeatedly with FINRA to learn what, if anything, it was doing to detect manipulation in today’s microsecond trading environment. FINRA admitted to me that its computer programs only allowed it to monitor the market in multi-second increments. They were, in effect, engaged in the hopeless endeavor of using a Brownie camera to capture an image of a bullet train. “Guys,” I said, “there’s an entire multibillion dollar industry of high-frequency traders operating within your margin of error.” As it stood, no one could look for, or detect, stock manipulation at the current high speeds. FINRA didn’t dispute this. For our part, we were determined to prove that a workable monitoring solution was possible. So we threw ourselves into composing another letter to the SEC. Attached was a five-page memorandum that detailed the obsolescence of the current reporting requirements and offered specific suggestions, gleaned from some of the top experts in the field, on how to update them.

Meanwhile, the pushback from Wall Street was intense and multi-pronged. The Blob oozed through the halls of government, seeking, through its glutinous embrace, to immobilize the legislative and regulatory apparatus, thereby preserving the status quo. The executive jets of the Wall Street air force flew sortie after sortie, transporting high-ranking emissaries from new York to Washington to meet with the SEC, [Senator Chris] Dodd and [Senator Richard] Shelby staff, and the staff of other senators on the Banking Committee. Some of the executives, no doubt less enthusiastically, even met with Josh and me. The research companies and market experts Wall Street employs also raised their voices against us. At times it got ugly. Ted was called a crackpot and dangerously uninformed. He was accused of “politicizing” market regulation (a strange notion considering he wasn’t running for election). It seemed as if Wall Street, which wasn’t used to someone on Capitol Hill asking in-depth questions about arcane issues, wished to silence or marginalize its critics. Industry people would always ask me, “What got Kaufman so interested in this stuff?” Used to politicians whose top priorities were to please their home-state business interests and raise money, they had trouble fathoming that Ted was so interested because it was the right thing to do. He believed in fair markets. And because he was genuinely concerned about emerging issues that threatened the stock market, where half of all Americans keep a sizable portion of their retirement savings.
Ted Kaufman Meets With SEC Chairman Schapiro

In October 2009, then Senator Ted Kaufman asked to meet with SEC Chairman Mary Schapiro to discuss how dramatic changes in our stock markets had in only a few years time led to an explosive growth in computerized trading.

When she walked into Ted’s office, my first reaction was that I thought she looked exhausted, which made me feel some sympathy toward her. Ted had been spitting bullets at the SEC for months, but even his manner seemed to soften from meeting her and sensing her fatigue. After they exchanged pleasantries, Ted launched into a brief summation of his views, which he’d been using effectively with his fellow senators:

Just like with derivatives, which blew up and nearly sank the country, we’ve got the same formula with HFT. I call it the Kaufman Formula. Whenever you’ve got a lot of change, a lot of money, no transparency, and therefore no effective regulation—watch out. Because the next thing you could hear is “boom.” There’s been a lot of change. The stock markets have transformed dramatically in only a few years time. There’s a lot of money. The daily market volume by high-frequency traders is now over 60 percent. And they’re making billions of dollars a year. There’s no transparency. The SEC has admitted you’re not collecting any data and you have almost no baseline understanding of HFT. And therefore we have a rapidly expanding market that’s operating completely in the dark, with no effective regulation. I’m very worried that this is a prescription for another disaster.

Schapiro took it all in. She responded by reiterating her pledge, which she’d made publicly in response to Ted’s letter, that the SEC would conduct a comprehensive review of market-structure issues and HFT. She added that she had many other issues on her plate. And indeed she had. America had just been through the biggest financial disaster in sixty years; Bernie Madoff’s Ponzi scheme had gone undetected by the SEC for years despite repeated warnings from whistleblowers; investors were rattled and worried that the SEC was toothless. Nevertheless, it was obvious to me that she only had one choice if history was to judge her well: she had to do something.

Ted must have been thinking the same thing. Near the end of the meeting he told Schapiro, “I don’t believe you’re going to do anything about high-frequency trading.” Looking him straight in the eye, she replied, “You just watch.” We watched for nearly three years. It wasn’t until July 2011 and June 2012 that the SEC approved minimalist rules that would force market participants to collect the data that would enable the SEC to begin—begin—the process of understanding HFT’s impact on markets. In effect, Ted and I and America are still watching and waiting for the SEC to take meaningful action.

* * *

Newton’s first law of motion states that “every object continues in its state of rest, or of uniform motion in a straight line, unless compelled to change that state by external forces acted upon it.” If he’d replaced “object” with “organ of government” he’d have written the first law of organizational inertia. Ted and I knew all about that law, because we felt its immobilizing force every day on Capitol Hill. So we knew how difficult it was for an organization like the SEC to think, and move, in new ways (particularly with the weight of The Blob serving as a constant check against motion). We tried to be a helpful, not hectoring, external force, to prod with useful ideas, not jab with invective. As the Reverend Jesse Jackson might have said: we tried to engage, not enrage.

During his term in office, Ted went to the floor every week to praise a federal employee. One week, he picked an SEC employee, an attorney in the Enforcement Division who’d recently won an insider-trading case involving U.S. Treasury bonds. The speech was an opportunity to reassure SEC employees that one of their toughest critics was nonetheless sympathetic to their situation. “As the SEC embarks on its next chapter, I want all of its employees to know when they walk out of that lobby each day and see the Capitol Dome, they should feel confident that those of us who work under it are their partners. . . . The era of looking the other way is now behind us. The time has come to look forward.” It was, in keeping with Ted’s character, a noble sentiment and heartfelt (as trite and corny as they may sound, I believe those modifiers aptly capture Ted’s intent).

On the other hand, we were well aware of the three main impediments to the SEC taking meaningful action. First, nearly all the data, evidence, and analysis the SEC uses to monitor the financial industry come from the industry itself, creating a temptation for the industry to spin the data in its favor (as we’d seen with the naked-short-selling data provided by Goldman Sachs). Second, The Blob oozes endlessly in and out of the revolving door of public service. According to the Project on Government Oversight, 219 former SEC staff members filed 789 “post employment statements indicating their intent to represent an outside client before the commission” between 2006 and 2010. In other words, 219 former government officials were representing Wall street clients on matters before the SEC. Third, because the SEC has been so slow to start collecting data about HFT, it’s still years away from being able to propose HFT regulatory rules that it can empirically justify based on hard data (as the federal courts will require it to do).

Attached to our final letter to Chairman Schapiro, dated August 5, 2010, were eight pages of proposals for addressing the above-mentioned (and other) shortcomings: the need to bring light to dark pools, to eliminate conflicts of interest, to ensure that regulators have the data they need to prevent manipulation and accurately assess whether small investors are being ripped off. The letter pointed out that how the SEC responds to our proposals is “a test of whether [it] is just a ‘regulator by consensus,’ which only moves forward when it finds solutions favored by large constituencies on Wall Street, or if it indeed exists to serve a broader mission.”

As part of our effort to engage, not enrage, we didn’t drop the letter through the SEC’s transom like a hand grenade and run away. Prior to August 5, I met with the director of the SEC’s Division of Trading and Markets and provided him and his deputy with an hour-long briefing on everything we’d learned and what the letter would propose. As a joke and gesture of good will, I’d taken along a Senate calendar with the prior days X’d off and a big red circle around Ted’s last day in office to indicate that we suspected they were counting the days. Ted had signed it and added “keep up the good work!” After I finished my presentation, one of the director’s responses was, “Wow, it’s great to hear from someone who isn’t from the industry.” When I got back to my office, I called a friend who’d been a top staffer for former SEC Chairman Bill Donaldson, and he told me, “Jeff, it’s true. The only people who walk through the SEC’s door are Wall Street people bitching about SEC proposals."

To read more and buy the book, visit

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Seasmoke's picture

i am shocked, that gambling is taking place in this establishment

Marley's picture

The House never loses.

El Oregonian's picture

Wall St., where dumb money goes to die...

TwoShortPlanks's picture

When Spain, Portugal, Britain, Holland explored the Northern and Southern Americas they brought items to trade with the indigenous Indians. They traded interesting but essentially worthless trinkets for Gold, Silver, Cocoa, Opium, Coffee Beans etc. The West traded worthless items for Real-World Goods. It took a while, but eventually the Indians woke up to the reality that they were trading valuables for trinkets and refused to trade…and so they were conquered, by ‘Conquistadors’, who enslaved and set to work the Indians, and set up shipping networks to ferry real world goods (wealth) back to Europe for the Royalty and Aristocracy of Europe.


It pays to keep this historical event in mind while reading the following….


Up until the 1950’s just about everyone in the western population owned at least a meaningful portion of their wealth in Gold, Silver and/or Diamonds, as tangible assets. Now, less than 0.1% (my assumption) own any at all, other than what's found in jewellery, most of which is just diluted rubbish or simply fake.


ZH: “the net worth of the US consumer, declined from $63 trillion to $62.7 trillion….only $24.2 trillion are tangible: i.e., real estate and durable goods. The remainder, $51.9 trillion or 68.2% are Financial assets”.


We have drifted from gold & silver, to paper money savings, to superannuation (legalised laundering of your and your employer's money), to [debt laden] real estate, to shares & equities derived from rises in equity (fake wealth) of property value gains….and now we find ourselves with about 30% hard assets and 70% fake-funny-money. The hard assets are either depreciating (cars, boats etc) or cheaply made property which is subject to market/economic fluctuations; and what goes up must come down. Everything is getting made more cheaply yet we are paying more for the non-privilege.


Has anyone actually saved money the old fashioned way and bought hard assets, in the last 20 years?....very few people I’m guessing. And since nobody has the will to save anymore, this is not a trend, it is an epidemic, a sickness, and nobody, and I really do mean nobody, sees the folly in it.


Most importantly, somehow, we have traded-away all that Gold & Silver in exchange for funny money, paper certificates claiming ownership of something intangible and more than likely with a counter-party (or 20), cheaply made tangible assets which need replacing regularly, and a population of zombies completely and utterly addicted to trinkets (iPhones, GalaxyS, iPad, Play Stations, X-Boxes, Facebook, Twitter {for Twits}, Farmville etc)…where did all the real wealth go, and who has it…who are the modern world Conquistadors who have swindled us?


You can call me crazy if you like, but I believe we are living inside a bubble within a bubble. A delusional psycho-financial sickness bubble, within a speculative financial bubble, within a Fiat bubble.


The remedy for cure is very simle. Forget your debts, just keep your head above the water-line. Whatever you have left each month, just buy Physical Gold and hoard it...whatever its cost, it doesn't matter. Becasue a day will come when the pendulum of the public mindset will swing the other way, the mania will fixate on physical (PMs), nobody will be selling, and you'll be lightyears ahead of the curve.

TwoShortPlanks's picture

40 years ago, with one perosn working full-time on average wages, a couple could save enough money for a 40% deposit on an average house within 8 years.

How far would those metrics get you today...?

This is why the Australian housing market is doomed to find its' long overdue clearing mechanism.

I have Gold, I'm ready to BTFD.

narapoiddyslexia's picture

Which is very good, as anyone who gives any of their money to Wall Street for safekeeping is an idiot.

nofluer's picture

Don't despair. There are others like you out here. 24 years ago my wife and I moved from the city and bought a nice little property with about 25 acres of tillable land and a lot of woods. It's almost paid for. If the financial creeks don't rise too much, it should be paid off next year. We can't afford gold - but this year we bought two Jersey cows, one to turn into hamburger for the freezer, one to turn into butter, milk, cheese, yogurt, and calves for future hamburger. Of course we'll never really OWN the property because of the rent-seeking government and its "property taxes" - but as long as we can scrape up enough to pay the land ransom every year - we can live here. To us a functional tractor, hay making equipment, and planting and harversting equipment (paid for with cash) will be our "gold" and "silver." Oh... and I sold my last equity this year. I am now completely divested of all "financial instruments" except some of Uncle Ben's Green Stamps which can be traded in for premiums - things like tractors, diesel fuel, etc.

falak pema's picture

Good analysis deep down.

Concerning the punch line at the end :

Did you read about the 69 year old hermit who died in California with 200$ in his bank and 7 million $ in gold bars?

Pity he didn't have a family to give it to. 

Are we all, at best, like that hermit, is that where we are heading?

Number 156's picture

Actually, wall street is part of that 47% that's on the government dole thet Romney was speaking about.

Kobe Beef's picture

Yep, parasites above, parasites below, the productive caught in the middle.

ndotken's picture

"Let me write the rules of the game ... and it won't matter what game we play."  -  Archie Karas

Mactheknife's picture

Two words..."term limits"...the ONLY way to stop this shit.

samsara's picture

Read it again,  Everyone he talks about in the blob never run for office.   They populate all the agencies.   It's the 100,000 people that never run for office that run the con he is talking about.

 The only way it will end is when the host dies. 

ACP's picture

Or to put it another way, "Well, slap my ass and call me Sally!"

LMAOLORI's picture



Here's why Wall St always wins $$$$$$$$$$$$$$$$$$$$$$$$$$

Money Funds Step Up Fight --- Fidelity and Others Have Dedicated More Lobbyists to Beating Back SEC Rules



Part of their strategy involves courting lawmakers who are on key committees or close to SEC commissioners. For instance, in May, Federated hired a former chief of staff to Sen. Robert Menendez, paying him $30,000 in the second quarter. Mr. Menendez, a member of the Senate Banking Committee, backed the SEC appointment of Luis Aguilar, a Democrat seen as a swing vote on the five-member commission.

Mr. Aguilar, a former general counsel for Invesco Inc., the 13th largest money-fund company by assets, has said he doesn't believe there is sufficient evidence that additional reforms are needed. A spokeswoman for Mr. Menendez declined to comment. Mr. Aguilar declined to comment. (more at link)


Obama is stealing Wall Street from Romney

SEC Keeps Ratings Game Rigged

Watchdog Raises Questions about SEC's Oversight of Former Employees Who Go through the Revolving Door






Short Memories's picture

I'm Shocked, SHOCKED!

putaipan's picture

thanks for the hudson link- one good linky deserves another- newest audio interview-


most of you guys are into some liberterian thing (go keiser)....when what we need is hudson/keen/bill black reform....

Dr Benway's picture

Everyone here on ZH is fixated on the THEORY when it is in the IMPLEMENTATION the challenges are

nmewn's picture

“Wow, it’s great to hear from someone who isn’t from the industry.”

Ah yeees, now go away kid, ya bother me.

Hedgetard55's picture

If you were to line up every bankster and put a stake through their hearts, a silver bullet in their brains, and then cut off their heads and put them on pikes surrounding the Marriner Eccles Bldg, that STILL would not be enough to stop them from ruining the nation. The heads would all be yacking at each other and giving orders to their lackeys.

nmewn's picture

Well, they are kinda "disconnected" from the body of the host now aren't they? ;-)

The thing here is, we have the Ivy League class...and then us.

No one wants to confront the reality that they are some of the dumbest, social engineering fucks on the face of the planet. Who thought it would be a grand idea to force lenders to loan to those who could never afford to pay it back? And then allow them to insure and leverage against loss? And call a debt an asset? Who thought it a positive idea to remove the barrier between the people and the casinos they run? (think Glass-Steagall).

Where did this concept come from that simply issuing more debt (printing, thus devaluing labor) to mitigate the debt losses from the above, would solve a debt/deficit/loss problem?

It came from people with a certain snobbish pedigree, with plaques on their walls to prove their ineptness to themselves, trained in the art of fancy over finance.

Umh's picture

Well they sat in a meeting one day long ago and many times since and noticed that the system will let them do this. As long as they don't have to pay the price for their idiocy they will keep playing and winning. I sat in many meetings on a much reduced scale and watched the clowns play with paper assets. They can do this because there is a disconnect between the real world and the paper world. Sometimes the disconnect is as simple as a time lag; enough time for them to get theirs and skip town. It's like the macho manager who knows that when the bill comes due she will be working at her next job. When you come right down to it derivatives are like this and the disconnect between the derivative and reality is where the game players rejoice and throw a party.

ptoemmes's picture

This one will frost your...:

I'm thinking maybe a ZH Militia...

TrustWho's picture

Kleptocracy: Vote for Ron Paul!

The blob operates like the elite network in the Soviet Union! I do not know how you fight this shit.

kevinearick's picture

civil marriage, the clintons comes to mind. machev didn't care for the middle class derivatives of capital and government for a reason, depravity.

you never noticed the irrational mating rituals at univerrsity, or considered why they exist?

power (black hole) couple?

examine the root.

do you really think bill and/or hillary, and/or their like (obamas), could compete with you in a fair contest?

consider what happens when the dead weight is removed.

"elite" incest is no accident.

have you ever walked across harvard?

impermanence's picture

Wall Street always wins for the same reason that the Vatican's walls are painted with gold.

blunderdog's picture

As true as that all may be, seems to me there's a more simple explanation.

"Wall St." is just the association that makes really big business deals possible.  As a result, the execution of really big business deals, no matter the outcome, is "good for Wall St." 

The only way Wall St. can "lose" is through reducing everyone's ability to conduct really big business deals.

Well...who the hell wants to do THAT?

There's an elegant dovetail with the increase in sweepstakes jackpots.  When there's a half-billion dollars "up to win," OBVIOUSLY everyone is more motivated for some tiny piece of that action, even when they know full-well they're not going to be one of the "gainers."

GoinFawr's picture

oh, and HFT skimskimaroo. Ever buy airline tix online?Same thing. iFuggedaboutit.

Arnold Ziffel's picture

Record Banker Bonus year again ?


baldski's picture

And Joe Biden, the guy Kaufman replaced took $140,000 from the banks and voted for the latest edition of the bankruptcy act as did Harry Reid, both good democrats! Only Harry only cost 106,000 pieces of silver to betray the country! Check

Urban Redneck's picture

For both of them it's a family affair- as their children have sold thier souls (and in the case of the Delaware AG, their office) to benefit from political corruption.   If only the extinction of entire bloodlines would came back to vogue we might be able keep some the criminals in check.

Schmuck Raker's picture

I haven't read the article yet. Because...I'm afraid to.

Just tell me, somebody, is it going to depress me?

Judging by the lead-in it will. If that's the case I'd prefer to read the book before I'm too morose about the whole affair, just from this vomitory*.


Schmuck Raker's picture

*P.S. Yes, a thesaurus popped up with this irresistible word.

Excursionist's picture

The lobbyists employed by the industry fascinate me.  Take the Goldman Sachs naked short selling example cited in this excerpt...  What kind of an adolescent says to himself, "When I grow up, I want to spin facts and lie by omission to government regulators to advance the interests of my employer?"

falak pema's picture

its called decadence; and it leads to the bonfire of vanities.

LitheLyricist's picture

Keep up the good fight Kaufman. FWIW, the revolving door btw regulatory bodies and private sectors exists for every industry: pharmas, energy, transportation, etc, u name it.  Finance is not unique.  As a relatively small-time trader, I've complainted to the SEC numerous times about clear cases of electronic frontrunning, in which the iquidity I wish to remove disappears simultaneous to (read: "AFTER") the entry of my order to remove liquidity.  These complaints have long been ignored without investigation.  I am not a conspiracy-theorist in general, and there are definitely numerous examples of legal and beneficial HFTs, but the speedy frontrunning of orders coming entering the system is very clearly corrupt.

P.S.  We need to eliminate the uptick rule on stocks that are down over 10% in a short amount of time.  This does nothing to impair falling prices, and instead merely eliminates liquidity to the downside from traders that would otherwise be covering shorts.  This fact is obvious if you ever watch the order book in a CB'd stock--lots of offers while the stock's rising, no bids when the stock is falling, resulting in sharp, fast downmoves, and slower upmoves.