They have known about all of these outrageous, flagrant, abusive practices since at least 2009, but it took public anger prompted by Lewis’s “Flash Boys” to finally prod some action from prosecutors. See: NY AG eyes exchanges in High Frequency probe.
We should recall that it took 4 more years of heinous acts and anarchy by investment bankers after the crash of ’29 before policy makers and prosecutors finally took serious action to clean up the snake pit. First the Pecora Commission had to bring the abuses out in a public hearing. Maybe Lewis is a modern day Pecora?
“The New York Attorney General’s office is seeking information from exchanges and alternative trading platforms about their relationships with high frequency trading firms, as part of its probe into allegedly unfair trading practices on Wall Street, according to sources familiar with the situation.
Attorney General Eric Schneiderman’s office is expected to send subpoenas within days to exchanges, one of the sources said on Thursday. The subpoenas will likely focus on how high frequency traders may receive information before other market participants.
Another source said major banks that operate dark pools, or platforms where trades take place out of sight of the rest of the market, have been sent letters asking for information.
The sources spoke this week on condition of anonymity because they were not authorized to discuss the matter publicly.
The major U.S. exchange operators include IntercontinentalExchange Group (ICE.N), Nasdaq OMX Group Inc (NDAQ.O) and BATS Global Markets.”
In his 1939 memoir “Wall Street under oath” Ferdinand Pecora wrote:
“Bitterly hostile was Wall Street to the enactment of the regulatory legislation…had there been full disclosure of what was being done in furtherance of these schemes, they could not long have survived the fierce light of publicity and criticism. Legal chicanery and pitch darkness were the banker’s stoutest allies.”
And they still are…so far at least…It is way past time to start calling thieves, thieves and cheats, cheats. Tolerance is killing free markets and hopes for a brighter future.