SEC Probing Possible Stock Chaos Shenanigans
Time to crack down on algorithm trading, lawmakers say
By Rob Quinn, Newser Staff
Posted May 7, 2010 3:40 AM CDT
A floor trader checks on the stock price at the Hong Kong Stock Exchange.   (AP Photo/Kin Cheung)

(Newser) – The SEC is on the trail of securities traders who might have "accidentally or maliciously" triggered yesterday's stock market see-sawing, insiders tell Bloomberg, or exploited it to profit illegally. The SEC and the Commodities Futures Trading Commission said after markets closed yesterday that they plan a joint probe into "unusual trading."

Whatever the cause of the Dow Jones' dizzying plunge, the panic has caused renewed calls for the SEC to crack down on high-speed trading using computer algorithms, Reuters reports. "The battle of the algorithms—not understood by nor even remotely transparent to the Securities and Exchange Commission—simply must be carefully reviewed and placed within a meaningful regulatory framework soon," urged Democratic Sen. Edward Kaufman.

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Showing 3 of 12 comments
alkaseltzersammich
May 7, 2010 2:26 PM CDT
High speed trade terminals are a gift and a curse. They seriously need to be regulated.
richirich
May 7, 2010 1:06 PM CDT
How is it that these reprobates can get by with this, and how much do they pay to see it?
bewilderbeast
May 7, 2010 12:47 PM CDT
Decent reform NOW. We need an end to thieves writing the laws that allow them to steal and gamble with OUR money - where they just cream the profit and the "fees", and the risk is all ours! Simple laws. Clear language. Proper liquidity levels. And yes, that means less growth, but remember a lot of the "growth" was lies!