March 26, 2012, 3:00 PM — The U.S. Securities and Exchange Commission (SEC) is investigating whether trading firms that use computerized high frequency trading algorithms have an unfair advantage over other investors, according to a published report.
Citing unnamed sources, The Wall Street Journal (WSJ) reported that the probe was prompted by the SEC’s investigation into the so called “flash crash” in 2010.
The SEC did not immediately return a request for information on the latest investigation.
According to the Journal, the SEC is focusing the current investigation on a number of computerized exchanges, including BATS Global Markets, which operates stock exchanges in the U.S., the BZX Exchange and the BYX Exchange. BATS, Lenexa, Kan., is in the process of going public.