“The court has awarded the Securities and Exchange Commission (SEC) a full and deserved victory in a case that will make our trading markets fairer for all investors. Every day, high-frequency trading firms like Citadel withdraw investor funds using state-of-the-art trading systems, a twinkle of an eye to anticipate upcoming market movements and choose Investors demand favorable prices.Then they turn around and immediately resell these shares at an enhanced price, taking billions of dollars with assured profits.This practice is called “latency balancing”, and it moves money from the pockets of ordinary investors into the coffers of professional professional traders who can take full advantage of the “peak intrusion into the market.
“That’s not fair, which is why IEX, an investor-friendly exchange, has developed a new order type that helps neutralize the advantage of HFTs. When the market price is about to change, it resells pending orders before the HFT can strike, weakening its advantage. With so much easy money at stake, Citadel was quick to challenge the SEC’s approval of the matter in court.
“Fortunately, the court was prompt, dismissing all of Citadel’s arguments and affirming that the SEC’s decision was based on solid evidence, was not unfair, arbitrary and capricious, and was properly explained. The court also appreciated what was at stake. , as we explained in our friends note on the issue. It really is a double win. This means that technological innovation like the IEX order type can make life better for everyday investors – including the countless retired savers who should be able to count on A fair market. It is also a strong precedent, confirming that a well-supported and supported decision by the Securities and Exchange Commission can survive the almost inevitable legal challenges of financial firms losing their unfair advantages and thus their unearned unearned profits.”
Better Markets is a nonprofit, nonpartisan, independent organization founded in the aftermath of the 2008 financial crisis to advance the public interest in financial markets, support financial reform on Wall Street, and make our financial system work for all Americans. repeatedly. Better Markets works with allies – including many in finance – to advance pro-market, pro-business and pro-growth policies that help build a stronger and safer financial system that protects and enhances Americans’ jobs, savings, retirement, and more. To learn more, visit www.bettermarkets.com.