Former SEC Director Warns Against Automated and Secretive Market “Rigged Against Retail Investors”
Mac Slavo
March 11th, 2015
SHTFplan.com
The former director of the SEC, John Ramsay, has stepped out to warn that market is rigged, and that the system is headed for a major correction “one way or another.”
Today’s financial ‘ecosystem’ is a set up for unfair advantage to those playing a game controlled by high frequency trading (run by automated computer algorithms) and secret ‘dark pool’ investors, as Ramsay sees it. Bloomberg reports:
The SEC’s current trading rules, known as Regulation NMS, are partly responsible for the flourishing of high-frequency trading and the dispersion of trading across more than 40 venues, [Ramsay] said.
Ramsay’s denunciations come during a period of unprecedented scrutiny of equities trading. A chorus of criticism, sparked by the claim in Michael Lewis’s book about Katsuyama and IEX, “Flash Boys,” that the market is rigged against retail investors, has questioned the tactics involved in using algorithms to buy and sell shares in fractions of a second.
In an interview, Ramsay said his opinions grew more critical in recent years as he watched the market fragment into 11 public exchanges and more than 40 less-regulated private venues such as dark pools. Trading became more complex and prone to technological malfunctions in the face of rules that were supposed to boost competition and create new choices for investors, he said.
The Rest…HERE
