Ted Kaufman - United States Senator for Delaware

Sen. Kaufman Featured in Financial Times, New York Times, Dow Jones

August 27, 2010

 

Week of August 23: Kaufman's August 5 Letter to SEC Urging Stock Market Reform Featured in Financial Times, New York Times, Dow Jones

 

"Regulators have yet to identify definitively the root causes of the 20 minute period of wild gyrations in stock prices on May 6. But their search for answers has triggered a debate on the advantages, and otherwise, of the significant growth in high-frequency trading. One element coming to the fore is the level to which these computerized traders, who can each execute hundreds of thousands of trades in a single day, are policed. Ted Kaufman, a Democratic senator from Delaware, said this month that the regulators 'must end the current ‘wild west’ environment of anything goes in the microsecond trading world and replace it with a sense that trading activity is being actively monitored and policed for illegal behavior.' Mr. Kaufman, calling for more stringent controls on high-frequency traders, said the Securities and Exchange Commission needed to assess whether the strategies deployed by the traders – chasing opportunities to arbitrage tiny price differentials – posed a systemic risk. It is a question the regulators themselves have highlighted."

- Jean Eaglesham, “Tighter Curbs on Traders After Crash,” Financial Times, August 23, 2010

Real full article HERE.

"High-frequency traders are capable of executing transactions in milliseconds. It has taken regulators rather longer to cast an eye on their activities. But the May 6 ‘flash crash’, when the US stock market plummeted almost 1,000 points in minutes, has focused regulatory attention on the systemic impact of automated trading. … Ted Kaufman, a Democratic senator, has compared the environment in which high-frequency traders are operating with the 'wild west'. The fact that officials still do not fully understand what happened on May 6 is telling. … Mr. Kaufman is right to raise a bigger question: who is served by ever-deeper liquidity? Equity markets in particular are not the mere playground of traders, but a place where retail investors deploy their savings. As regulators catch up with reality, they must ensure markets serve the non-professional users who access them.”

- Financial Times editorial, August 23, 2010

Real full editorial HERE.

"It sounds like 'Wall Street' meets 'The X-Files.' The stock market mysteriously plunges 600 points — and then, more mysteriously, recovers within minutes. ... In an Aug. 5 letter to the Securities and Exchange Commission, Senator Edward E. Kaufman, Democrat of Delaware, warned about a 'micro-arms race that is being waged in our public marketplace by high-frequency traders and others.' He said that the traders were moving so fast that regulators could not keep up.”

- Graham Bowley, “Stock Swing Still Baffles, With an Ominous Tone,” New York Times, August 23, 2010

Read full article HERE.

“Call him the stock market Senator. The fix-the-plumbing stock market senator, to be precise. ... There likely are some in the high-frequency trading community and other pockets of Wall Street pleased with the prospect that Kaufman’s term is winding down and that he won't run for election when his Senate seat comes up in November of this year. He's keeping the heat on them, as he is on the Securities and Exchange Commission. … You can agree or disagree with Kaufman’s recommendations. It's hard to disagree with the notion that what we call the stock market has morphed into a complex web of interactions that few truly understand. And it's good to see a legislator who knows his stuff before he speaks his mind.”

- Neal Lipschutz, “The Senator For Stock Market Reform Makes His Pitch,” Dow Jones Newswire, August 24, 2010

Read full article HERE.

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