Congressman Lobbies SEC for HFT Crackdown

The letter, which was sent on Friday January 18, tells SEC Chairman Elisse Walter and former Chairman Mary Schapiro that HFT has been responsible for increased volatility within US equity markets, which is discouraging individual investors.

Markey argues that HFT had a hand in recent market events such as the Flash Crash, BATS's botched initial public offering (IPO), and the near-collapse of Knight Capital last summer, while he also blames earlier forms of computerized trading for the stock market crash of 1987─Black Monday.

Markey urges the SEC to take advantage of a section within the H.R 3659 reform package, of which he was an author, which entitles the legislator to "prohibit or limit practices which result in extraordinary levels of volatility".

While acknowledging that supporters of HFT argue that it is a significant provider of liquidity, Markey says any increased liquidity is countered by the loss of investors, who feel that the trading process is now "rigged" by algorithms that can act before a human has time to think.

Markey has asked for a response from the SEC by February 7.

Markey says that any increased liquidity through HFT is countered by the loss of investors, who feel that the trading process is now "rigged" by algorithms that can act before a human has time to think.