The Securities and Exchange Commission does not currently have the ability to fully monitor what, by most accounts, makes up a majority of the stock trading activity in the United States, according to former SEC lawyers. What’s more, recent reforms and proposals are unlikely to make much of a difference, they say.
The SEC, the primary federal agency charged with overseeing the U.S. stock market, has launched new efforts to more closely monitor high-frequency trading — the ultrafast, computerized buying and selling of stocks, bonds and derivatives that now comprise the majority of stock trading in the country. This has increasingly come to replace the loud trading-room floor haggling that many Americans still associate with Wall Street.
But in interviews with The Huffington Post, former SEC lawyers said that those new efforts will likely be ineffective. While some argued that only a large budget increase would help the agency rein in high-frequency trading, others said that it is unlikely the agency will ever get a handle on that sophisticated market.