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Kaufman
Connection - Highlights of Ted's work for Delaware

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*Week of
August 23: Kaufmans August 5 Letter to SEC Urging Stock Market Reform
Featured in Financial Times, * [link 1]*New York Times, Dow Jones*
[link 2]


"Regulators have yet to identify definitively the
root causes of the 20 minute period of wild gyrations in stock prices on
May 6. But their search for answers has triggered a debate on the
advantages, and otherwise, of the significant growth in high-frequency
trading. One element coming to the fore is the level to which these
computerized traders, who can each execute hundreds of thousands of trades
in a single day, are policed. Ted Kaufman, a Democratic senator from
Delaware, said this month that the regulators must end the current
wild west environment of anything goes in the microsecond trading world
and replace it with a sense that trading activity is being actively
monitored and policed for illegal behavior. Mr. Kaufman, calling for
more stringent controls on high-frequency traders, said the Securities
and Exchange Commission needed to assess whether the strategies
deployed by the traders chasing opportunities to arbitrage tiny price
differentials posed a systemic risk. It is a question the regulators
themselves have highlighted."

*- Jean Eaglesham, Tighter Curbs on
Traders After Crash, *Financial Times*, August 23, 2010* [link
3]

*Real full article HERE [link 4]. *

"High-frequency traders are
capable of executing transactions in milliseconds. It has taken regulators
rather longer to cast an eye on their activities. But the May 6 flash
crash, when the US stock market plummeted almost 1,000 points in
minutes, has focused regulatory attention on the systemic impact of
automated trading.
Ted Kaufman, a Democratic senator, has compared the
environment in which high-frequency traders are operating with the wild
west. The fact that officials still do not fully understand what
happened on May 6 is telling.
Mr. Kaufman is right to raise a bigger
question: who is served by ever-deeper liquidity? Equity markets in
particular are not the mere playground of traders, but a place where retail
investors deploy their savings. As regulators catch up with reality,
they must ensure markets serve the non-professional users who access
them.

**- Financial Times ***editorial, August 23, 2010* [link
5]

*Real full editorial HERE [link 6]. *

"It sounds like Wall Street
meets The X-Files. The stock market mysteriously plunges 600 points
and then, more mysteriously, recovers within minutes. ... In an Aug.
5 letter to the Securities and Exchange Commission, Senator Edward E.
Kaufman, Democrat of Delaware, warned about a micro-arms race that is
being waged in our public marketplace by high-frequency traders and
others. He said that the traders were moving so fast that regulators
could not keep up.

*- Graham Bowley, Stock Swing Still Baffles,
With an Ominous Tone,* New York Times*, August 23, 2010 [link
7]**

*Read full article HERE [link 8]. *

Call him the stock market
Senator. The fix-the-plumbing stock market senator, to be precise. ...
There likely are some in the high-frequency trading community and other
pockets of Wall Street pleased with the prospect that Kaufmans term is
winding down and that he wont run for election when his Senate seat
comes up in November of this year. Hes keeping the heat on them, as he
is on the Securities and Exchange Commission.
You can agree or
disagree with Kaufmans recommendations. Its hard to disagree with the
notion that what we call the stock market has morphed into a complex web
of interactions that few truly understand. And its good to see a
legislator who knows his stuff before he speaks his mind.

*- Neal
Lipschutz, The Senator For Stock Market Reform Makes His Pitch, *Dow
Jones Newswire*, August 24, 2010* [link 9]

*Read full article HERE
[link
10].*

----------------------
footnotes
----------------------
[link 1] http://kaufman.senate.gov/press/in_the_news/
[link 2]
http://kaufman.senate.gov/press/in_the_news/
[link 3]
http://kaufman.senate.gov/press/in_the_news/news/?id=9e645644-5056-9502-5d28-0cfa17a7fd34
[link 4]
http://kaufman.senate.gov/press/in_the_news/news/?id=9e645644-5056-9502-5d28-0cfa17a7fd34
[link 5]
http://kaufman.senate.gov/press/in_the_news/news/?id=a3799ae6-5056-9502-5d29-51228eba3c2a
[link 6]
http://kaufman.senate.gov/press/in_the_news/news/?id=a3799ae6-5056-9502-5d29-51228eba3c2a
[link 7]
http://kaufman.senate.gov/press/in_the_news/news/?id=9e658b88-5056-9502-5d77-9e6a3f9e2f31
[link 8]
http://www.nytimes.com/2010/08/23/business/23flash.html?_r=2&src=busln
[link 9]
http://kaufman.senate.gov/press/in_the_news/news/?id=addea920-5056-9502-5d03-51a7660da6e1
[link 10]
http://randomnotes.newswires-americas.com/?p=7679


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