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What is Scaring Investors Away from the Markets?

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  • Description

    Former SEC Chair Arthur Levitt on how to restore investor confidence in the markets.

  • Duration 5:01
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Right the fiscal clip will no doubt hit regular investors hard many of already lost faith in the stock market pulling more than a hundred billion dollars out of US stock mutual funds and ETFs.

Out of fear since 2009.

-- -- as a former chairman of the Securities and Exchange Commission joins me now by telephone.

Chairman thanks for coming on the show tonight it's great to talk to you it has been years since I have talked to -- And I wanna -- your opinion.

On this move this this free for all by small investors.

Out of the market they're running away.

Had 46 of percent of Americans say they own stocks.

Today 53%.

Did in 2001.

What's causing this -- General Europe.

What's going on a -- it would all of this scandal that we've seen.

Insider trading episode.

Which is that it shut the market down.

Our frequency trading.

Nearly drove.

Bright securities out of business as a whole series of events such as that ever since he has -- eight.

There there has -- the average investor.

Force.

Lose trust in our markets.

So where Barnes and to sit on the sidebar.

Let's.

You weren't known as a pro investor Abbott said he cleaned up the Muni bond market at the time you -- the longest serving FCC commissioner.

How we fix this problem how do we -- -- confidence in the system.

Well I think it almost.

As a result of the system getting better by that.

The regulators got what.

Do product you -- -- its credit.

They don't right now hand the people that are being regulated.

Or they're doing that there's.

Are way ahead of the regular.

-- level about -- The biggest state would be regulated.

Over right.

Effective that is mistake of -- -- not pay attention.

What caused the problem site security.

What caused.

-- market crash.

Two years ago and what can be good to reassure investors.

That they've got paid for or secure our future.

What that is.

Sound rational.

Reasonable regulation if that's possible.

Com.

Big when you dig into what these fellows are doing for a letting and and these -- Dark pools that exist all over the country all over the world in fact.

It's it's such a far cry from the kind of investing -- -- you are used to regulating.

When when you were running the FC CE's these people are making decisions on the basis of it any fundamentals whatsoever.

This drives the market further and further from its function.

Raising capital for CEO's in companies all over the world and to someone with more candid bedding when -- -- Not necessarily.

I admit that it looks like.

But this is progress its progress in terms.

The price.

Investor by security is lower than ever.

The -- huge fast.

Now how do we balance.

With -- interest -- -- best.

To see to it it -- -- it if we did spirited deal as institution.

I noticed that the SEC has just fired outside her.

-- hired one of these burns one of these high frequency trading firms to assist them and it's a very controversy only move because people feel.

Why are you letting that hand in the dead Brister into the -- -- the fox into the -- what do you make of that.

I think it's Smart move because the reputable for.

It went through a standard government contracting process.

And -- purpose providing the -- to deliver dad.

Outperforming any type of analysis for regulators.

Itself -- like getting your base and to build a brick wall.

-- corporate effect with a build a core.

What the SEC get the car -- -- that they have to drive it forward and rise of the relevant pollution.

They need this professional -- -- no longer and rely upon.

Long term civil servant to deal with.

Progress made by.

People in the markets provide the product.

Do structure which barrel -- bark at risk of bought back.

The old days we had expected to correct the day -- -- a -- That's right.

Well Arthur -- thanks for coming on tonight appreciate your time interesting point of view on high frequency trading will continue to cover it.

I helped to come back some time and talk to us about it more thank you -- -- but --

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