Randy Diamond from Pensions & Investments reveals that New York Attorney General Eric Schneiderman said Friday that his office is investigating several high-frequency trading organizations that gain advantages by receiving market information early. Mr. Schneiderman would not name the organizations during comments at a business writers conference sponsored by the Society of American Business Editors and Writers in New York.
Mr. Schneiderman said small groups of traders are given the power to manipulate market movements when high-frequency data are connected with access to information. “This is what separates the ‘smart money’ from everyone else, ‘the dumb money,’” said Mr. Schneiderman, adding that it should be a huge concern to anyone who cares about the economy and the free flow of capital.
“It’s insider trading 2.0,” he said.