Ted Kaufman - United States Senator for Delaware

High Frequency Trading and Wall Street Reform

High Frequency Trading

Since August 2009, Sen. Kaufman has called on the Securities and Exchange Commission (SEC) to undertake a comprehensive review of high frequency trading and other market structure issues. His repeated warnings were unfortunately realized in the severe stock market plunge – the so-called “flash crash” -- on May 6. Since August he has repeatedly raised questions about the lack of transparency into these opaque market practices, the potential for systemic risk, and the inability of regulators to detect and police against high-speed manipulation. Sen. Kaufman has especially pushed the SEC to use its “large trader” reporting authority to “tag” high frequency traders and collect urgently needed data and release it to the marketplace on a time delayed basis.
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Wall Street Reform

In the months leading up to the passage of Wall Street reform legislation, Sen. Kaufman delivered a series of Senate floor speeches that addressed at length what he believed to be the central issues to preventing future financial crises: passing laws that will stand for generations to ensure financial stability by separating speculative and risky investment activities from the government-guaranteed portion of our financial industry, as well as mandating limits on the size and leverage of our shadow banks. Instead, the final bill relies on regulatory discretion to decide limits on the size, leverage and activities of dangerously concentrated financial institutions. Despite the bill's shortcomings, he applauded the establishment of a Consumer Finance Protection Bureau and much-needed reforms in the over-the-counter derivatives markets.
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