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Former SEC Chairman Harvey Pitt on the impact of high-frequency trading on the markets and investor confidence.
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High frequency trading making headlines this week.
And earlier and our our veteran trader Teddy Weisberg told us that speed kills.
For more on this I'm joined by Harvey Pitt former Securities and Exchange Commission chairman.
Hearty welcome to the show it's great to CEO.
What is the impact in your view of these high speed traders on individual investors.
I think over the long term.
It's.
-- a mole -- terms of investment opportunities where I think it's significant.
Is that we're having all sorts of glitches with the software.
And that is eroding investor confidence in driving individual investors out of our markets.
So what shall we do about it.
Well I think we have to get a grip on technology.
-- in high frequency trading we have Knight securities.
We have the the flash crash we have.
NASDAQ.
And FaceBook can all of these problems are steam -- learning.
And there has to be some orderly mechanism by which people use technology.
According to well established rules.
He had just this week we had that confusion over and will trade oil prices dropped dramatically and quickly.
Some people say hey this could be high frequency trading other saying no it's a fat -- trader.
Now the FCC.
Says it's finding the New York Stock Exchange for giving information to these high frequency traders and head of others what do you make of that.
Well I think this is some of very beneficial.
Move by the SEC I think proprietary training data.
It's something that really belongs to the investing public and the SEC is making certain.
But nobody gets an unfair -- -- this kind of information.
So I commend the SEC's actions in this regard.
It seems like this is out of control.
High frequency trading accounts -- about two thirds of all trading on the exchanges.
How do you put the genie back in the bottle.
I think one of the things you do is require that all trades -- a legitimate purpose.
You eliminate the trades that are effectively dummy your false trades and require that all trades he followed through.
Or that there be penalties associated with transactions.
That are canceled before there ever execute -- But something -- big job to we have the technology.
Available to where regulators to kind of track all of those trades.
I'm not certain.
-- the regulators are but that's a budgetary issue but the technology exists.
And the real requirement should be imposed by the exchanges and self regulators.
As wells by the SEC.
We need some affirmative action and we needed quickly.
Perfect pet thanks for coming on tonight fascinating interview and great to hear what you have to say -- to come back soon.
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