Tuesday, March 18, 2014
ALBANY, N.Y. (AP) — New York's attorney general has begun investigating split-second stock trading by high-frequency traders and is asking the exchanges to end them.
Calling them "unfair" at the expense of other investors, Attorney General Eric Schneiderman says federal and other state regulators should join in structural reforms.
While Schneiderman discussed his concerns at a symposium Tuesday at New York Law School, his office began investigating such trades last year.
Advantages include extra computer network bandwidth, ultra-fast connection cables and special high-speed switches to computer servers.
He says millisecond timing advantages let those traders make "rapid and often risk-free trades before the rest of the market can catch up."
New York's attorney general has authority to investigate and prosecute securities fraud under the Martin Act, which it has used to force Wall Street reforms.