Ted Kaufman - United States Senator for Delaware

Kaufman Statement on SEC Circuit Breaker Proposal

May 18, 2010

WASHINGTON, DC – Senator Ted Kaufman (D-DE) issued the following statement after learning that together with the national securities exchanges and the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC) issued a proposed “circuit breaker” rule in response to the May 6 flash crash:
 
“The collective reaction by the exchanges, the SEC and FINRA to add a system of circuit breakers to slow down the next flash crash is an important first step – but it cannot be the last.  There are deeper issues that these surface solutions do not address.  
 
“First and foremost, why on May 6 did our markets for 20 minutes stop performing their essential function: discovering the prices of securities based on a balance between buyers and sellers?  The answer, I suspect, remains wrapped up with the fact that 70 percent of the daily trading volume is by black-box computers that, for the most part, do not care about the intrinsic value of the stocks underlying their trades.”

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