Courtesy of Pam Martens.
Scott D. O'Malia, CFTC Commissioner
The regulator in charge of policing high frequency trading in the futures markets, the Commodity Futures Trading Commission (CFTC), held a “public meeting” yesterday to determine if the allegations raised in the Michael Lewis book, Flash Boys, relating to high frequency traders rigging the stock market might also be occurring in the futures markets.
As is increasingly typical of the U.S. markets themselves, the public was no where to be found at this “public meeting” yesterday. There was no one speaking on behalf of a consumer federation; no one speaking on behalf of disenfranchised small farmers who hedge their crops in these markets; no one speaking on behalf of the union employee or teacher or public municipal worker who is watching their retirement plan assets fleeced on millions of trades daily by high frequency traders who have obtained a litany of high-speed perks, rebates and tricked up order types at U.S. exchanges.
What we heard were the overtly defensive voices of the executives from the two major futures exchanges and their very supportive staff. Based on missing coverage this morning in the media, it does not appear that any major business media turned out for this “public meeting” other than possibly the Financial Times which carried a brief mention.
One person whom the CFTC may have asked to stand in for the public was Joe Saluzzi, co-founder of Themis Trading and an expert on needed reforms in the area of high frequency trading in the stock market. But because the stock market and futures market are vastly different animals, Saluzzi was decidedly a fish out of water at yesterday’s meeting.
CFTC Commissioner Scott D. O’Malia opened the meeting saying that “Michael Lewis’s book has stirred up quite a debate about high-frequency trading…” O’Malia said he wanted to “address these issues directly and have a frank discussion with all of you to understand how automated and high-frequency trading impacts derivatives markets.”
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