Reuters blog archive

from Financial Regulatory Forum:

ANALYSIS-SEC panel pits wider debate over automated trading

By Herbert Lash

NEW YORK, June 22 (Reuters) - U.S. security regulators have billed a panel they host on Tuesday as a talk about liquidity, yet really at issue are the fading ideals of long-term investing and the brave new world of rapid, automated trading.

The Securities and Exchange Commission has brought together some of the biggest practitioners of "high frequency trading" -- Tradebot Systems and Jump Trading LLC -- and a flag bearer of deep value investing, Southeastern Asset Management Inc.

The title of the discussion, a "perspective on liquidity," is apt considering the SEC and the Commodity Futures Trading Commission have identified a breakdown in liquidity as one of the likely causes of the still unexplained May 6 flash crash.

Yet for many in the market, in particular investors known as the buy side, more is at stake than arguing over whether automated trading has made markets more efficient and reduced trading costs, a view that the fast traders tout.

from Commentaries:

A Goldman trading scandal?

Did someone try to steal Goldman Sachs' secret sauce?

While most in the US were celebrating the 4th of July, a Russian immigrant living in New Jersey was being held on federal charges of stealing top-secret computer trading codes from a major New York-based financial institution---that sources say is none other than Goldman Sachs.

The allegations, if true, are big news because the codes the accused man, Sergey Aleynikov, tried to steal is the secret code to unlocking Goldman's automated stocks and commodities trading businesses. Federal authorities allege the computer codes and related-trading files that Aleynikov uploaded to a German-based website help this major "financial institution'' generate millions of dollars in profits each year.