“The secret of life is honesty and fair dealing. If you can fake that, you’ve got it made!” –Groucho Marx
I suspect the SEC, FINRA, and CFTC are big fans of Groucho Marx, or at least his observations on fair dealing. How else could they justify turning a blind eye to a global media powerhouse such as Reuters selling early access to market-moving information? How could these authorities not condemn a practice like high-frequency trading (HFT), which causes significant market disruptions on a daily basis and destroys investor confidence?
Why would agencies that are charged with oversight of the most robust capital markets in the world choose to disregard their fiduciary duty? My guess is, as usual, it all comes back to money.
But before I get too far ahead of myself, let me briefly explain what HFT is and why someone getting an early peek at information makes a complete joke of fair markets.