Courtesy of Pam Martens.
U.S. Attorney General Eric Holder Testifying on High Frequency Trading Before the House Appropriations Committee on April 4, 2014
SEC Chair Mary Jo White may have prejudiced ongoing criminal investigations of high frequency trading by the Justice Department and FBI by delivering her verdict on Tuesday that “The markets are not rigged.” Why the former chair of the litigation department at Debevoise & Plimpton would pre-judge an investigation by her Federal colleagues that is just getting underway should be a matter of great public concern. (The New York State Attorney General, Eric Schneiderman, has also opened an investigation.)
The predicament that White’s statement has placed investigators in is that if they find criminal wrongdoing and prosecute it, the head of the SEC will be stripped of credibility and potentially forced to step down as a discredited Wall Street cop with her head buried in the sand. If they don’t bring any serious cases, there will be the lingering doubt as to whether the SEC inappropriately challenged their interpretation of securities laws.
That the Justice Department’s investigation is in its infancy was confirmed by U.S. Attorney General Eric Holder at a hearing on April 4 before the House Appropriations Committee. Congressman Jose Serrano of New York asked Holder what he was doing in regard to high frequency trading. Holder responded:
“As I indicated in my opening statement, I’ve confirmed that the Department of Justice is looking at this matter, this subject area, as well. The concern is that people are getting an inappropriate advantage, information advantage, I guess competitive advantage over others because of the way in which the system works. And apparently, as I understand it, and I’m just learning this, even milliseconds can matter, and so we’re looking at this to try to determine if any federal laws, any Federal criminal laws, have been broken. This is also obviously something that the head of the SEC, Mary Jo White, would be looking at as well.”
Congressman Jose Serrano Questioning Attorney General Eric Holder During House Hearing on April 4, 2014
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