To think all it took to wake up not only the FBI (which generously provided a phone number [9]to all interested parties so others could do its work for it) but the porn-addicts at the most corrupt, complicit and clueless, not to mention bought and paid for, "regulator" in US history, the SEC from a five year slumber - yes, we started warning about HFT in April of 2009 - was one Michael Lewis book. Moments ago we learned that the SEC, with a five year delay, has opened several investigations into HFT.
Below is an artist's rendering of just what these probes look like:
From the WSJ: [10]
Ms. White, testifying before a House Appropriations subcommittee, said the SEC currently has "a number" of ongoing investigations regarding "market integrity and structure issues, including high-frequency traders." She declined to provide specifics about the investigations, but said they have been under way for "quite some time."
And now, please hold for laughter:
"We're very much focused on any abuses in that space," she said.
Ok, now you can laugh. And laugh some more:
The SEC and the Commodity Futures Trading Commission are looking into ties between high-speed traders and major exchanges, examining whether the firms are getting preferential treatment that puts other investors at a disadvantage, people familiar with the probes said Monday.
Since we feel generous, here is a place to start: [5]several hundred articles [5]covering precisely what you should have been investigating 5 years ago! And since we know you are budget strapped, we won't even ask for our finders fee for having been the first to expose the scam that is HFT - we realize that all those porn subscriptions cost a pretty taxpayer penny.
Then again, not even we are dumb enough to fall for the lie that the SEC is actually going to finally do something about HFT:
Ms. White acknowledged the SEC is in the midst of a policy debate on whether the speed and complexity of trading in stocks and other securities pose risks to markets. She said the SEC's approach on the issues would be "data-driven and disciplined." She stopped short of embracing any policy shifts.
The review of the guts of the stock market follows a string of market breakdowns, such as last year's failure of the Securities Information Processor, a computerized link that transmits market orders to the public and is overseen by the Nasdaq Stock Market.
Why? Because since hundreds of current SEC employees can't wait to quit their job in the glorious tradition of the SEC revolving door just so they can find a much higher paying job doing nothing at the same HFT firms they were supposed to be policing, and because it is the HFT lobby itself that controls the SEC (recall that SEC Uses HFT Firm-Designed Tool To Find That HFT Doesn't Cause Flash Crashes [11]), only an idiot would fall for the same lie again and again. Especially since Mary Jo White will have to promptly recuse herself from this investigation: after all the bulk of her former clients at Debevoise, especially Morgan Stanley, are some of the most flagrant abusers of HFT.
As for retail investor "confidence" in capital markets, that ship sailed long ago. Because no matter how high the rigged market closes day after day on increasingly worse economic news, they are never coming back, period.