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FBN's Charlie Gasparino on the SEC's worries over safeguards not being in place to prevent a massive trading implosion.
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That's nice to hear -- that error in cell officials at the SEC are continuing their sweep of brokerages following the implosion of Knight capital and concerns are growing.
That firms lack the basic tools to prevent catastrophe from hitting again Charlie Gasparino has the latest turn.
Got to hope and expect Hampshire had merit -- when I saw that I want to write coconut -- -- -- I don't I happen.
And in any event that that I got the greatest news and world today but.
This is kind of -- -- I mean one of the reasons why investors are pulling their money out of market as you know -- look at that you look at withdrawals from stock mutual -- it's pretty.
That is catastrophic -- or out of the market to losing confidence in the structure of the market 300 billion I think three huge amounts of money one of the reasons why I would say the major reason why is because they don't think.
The market structure is safe that you have stuff like Knight capital imploding over an -- trade that's a big problem following night.
-- implosion the SEC ramp up any pre existing -- -- major brokerage firms to see if they have the sort of trip wires.
That will prevent major catastrophe from happen again it's kind of adjusting -- not done yet.
We don't know when they're going to be done with lots -- -- out -- that -- try to get -- before the election and these things take time I don't know about that we have -- -- SEC.
But the basic law the basic things that -- -- -- is is the following.
That the SEC's really worry that major firms don't have those trip wires at another night could possibly happen again someplace else.
And these are very basic trip wires like something that would prevent.
You know would would just alert senior management hate.
Millions of trades are going out there and they shouldn't and that's a real problem in the market so that's what -- that's what they're finding in this -- they're also finding.
That -- that these fire walls may not exist.
And they may not exist in violation of current rules there is a market access rule that's out there.
Right now that says you have to have these -- -- so think about that a lot of firms including probably night.
Our -- violation.
Of the market access rule and the fact is that this -- -- requires and they probably don't.
We should point out that night in the summit meetings and in various settings continues to argue that quote unquote human error.
Was was to blame I I've always thought data BA degree if you -- never absolutely I never bought.
Remember their initial statement was that -- it was technical error.
There's clearly a human error when the New York Stock Exchange somebody put the program really wrong -- out of wrong with the program -- -- half finished this when the New York Stock Exchange.
Calls you up and says.
By the way got a problem and it doesn't get fixed for an hour or half hour you -- human error.
Are we -- some point out that Tom Joyce to see overnight allowed people are saying his job hinges on exactly what the SEC finds I think.
There is a -- going on I from what I understand this probably going to be a separate report.
On.
On night and a lot of his job going forward -- may depend on exactly what -- a quick question for you.
There's been a lot of articles going around about.
High frequency traders wanting more regulation so this doesn't happen again -- a -- that's true right.
Well I mean I think it depends I mean if I I know -- -- pretty well -- -- two.
-- to talk to -- they want they want some degree of regulation to listing the need is for a firm like night.
Which didn't have the basics involved and I've been to -- these firms are too it's it's a pretty sophisticated shop.
They have the basics the last thing they want is night which you know is willing -- but they want regulation and have a regulator in there -- -- usually say are the -- I'll answer your question -- -- -- visiting -- I will I will answer the question -- The last thing they need is for a night to happen because what happens is not just regulation but total you know -- clamp down.
And that's what they're worried about happening right now if you have people following the basic rules market access.
-- some reading something wrong.
It's pretty clear pretty transparent you have to have these trip wires Knight capital didn't.
If you don't have that well that's a big problem that's why a lot of people say Tom Joyce should be fired he should not be there right now because if you're the CEO of a firm.
And you don't have those trip wires you should go.
What do you see it -- they want more regulation yes I can and yes they want a lot regulator to come in and they want acquire yet they want to date they want to listen.
What's more regulation they want existing regulations.
To be imposed.
-- of sort of strict way I mean -- market access.
Pretty interest pretty pretty basic you know -- or violation of any trip -- current regulation and enforcement well I think you want more from maybe they meet maybe they're I I don't I don't know what your quoting you should give me the quote I can't I think they want more enforcement friend of exist up I think they want enforcement of existing regulations to be more vigilant.
Obviously when you have night.
Right I mean they must have been examined once.
Right where's the trip wires -- haven't -- -- -- didn't find them.
Thank you Charlie thanks Charlie.
