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The lone independent voice. Daily story · 25 October, 2012
  • I am a concerned citizen.

    I have been part of some incredible changes in the United States stock market over the past 8 years. As with any change, there are good and bad aspects to the technology revolution that has swept over Wall St. When I had finally had enough, I left the industry. I had planned to stay away, but it wasn't fully my decision. After hearing my story about why I quit my job on Cowbird, NPR asked me to record a commentary for their Marketplace program.

    Since then, I've been sought after by reporters seeking to understand what is happening in our markets, and why. Regulators have been interested in the perspective of a former insider, as have legislators. It's been a real thrill to be a small part of the political process.

    After the NPR segment, I was contacted by Scott Patterson, a reporter from the Wall St. Journal, and a senior aide to a Senator. I took a trip down to DC, met with both of them, leading to some incredible experiences.
  • My meeting at the Senate Office building eventually led to me testifying in front of the Senate Banking Committee's Subcommittee on Securities.

    Here is what it looks like to sit at the panel, just before Senator Jack Reed and Senator Mike Crapo would come in to convene the hearing.
  • The press coverage was extensive, culminating in an article in the Wall St. Journal about me and my testimony.

    This was followed by an invitation to sit on a Technology Roundtable at the SEC . The entire panel consisted of representatives from the industry, and I was the lone independent voice. I have found in most of these situations that there is no public advocate, no voice to counter the industry's arguments.

    In the foreground, with her back to the camera, is Mary Shapiro, the Chairman of the SEC .
  • I tried to point out the shortcomings in many of the industry's proposals. To demonstrate why they are trying to do as little as possible, yet make it look like they are taking action to stem the tide of crises in the stock market that seem to follow, one after the other.

    Over time, the incentive structure in the financial services industry has changed. Stock exchanges are now for-profit, but they are still "self-regulatory". This is the only industry in the United States in which this is the case. Because of this, they now are incentivized to serve their best customers, High-Frequency Traders, rather than their previous mandate which was to maintain fair and orderly market.s

    The other unfortunate truth is that neither they, nor the firms doing the trading, understand the nature of the new, electronic marketplace. I fear that nobody truly understands the implications of this new complex system, in which advanced algorithms trade with one another, game one another, and lead to non-linear outcomes causing periodic crashes, or more dangerous catastrophic events such as the Flash Crash.
  • Today I had a meeting at the SEC with regulators who are trying to figure out what they can do to help fix the system. They are a dedicated group, and it's exciting to be working with the folks on the front-lines.

    I followed it up with a meeting at the White House. I was very excited for this meeting!
  • However, it turns out that most meetings at the White House are in the Executive Office Building next door. Still pretty cool!

    I've now met with regulators, Senators, and even a member of Obama's advisory team. It's been a great experience, and one that I hope I can continue with, and help to make a difference.

    If you find yourself wondering what can a single person do, what difference can a concerned citizen make, I at least have some good news to report. It's still early to say whether any change will truly come from this, but there's a chance.
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