Ayala Pharmaceuticals Inc (ADXS)

[equaloppforall]

Just to add to this discussion, I code for a living. I can almost guarantee that not a single member of congress or their staffers would understand remotely as to how HFT or trading algorithms work or how the underlying trading rules are set. To be honest, they shouldn't have to since no one knows enough about everything.

Anytime that government tries to regulate at the level of detail on any issue, private industry gains the upper hand as almost all the subject matter experts are on their side. Now, regulating at the level of detail is unavoidable in most industries that are necessary for everyone's benefit(food and medicine, infrastructure and many others) and the government can try the best it can.

But the hedge fund/market making industry is not a necessity. Sure, they have the right to exist just like all other companies, and have the right to make money legally as much as anyone. But they can easily be prevented from indulging in certain practices, like HFT, altogether since there is no "transaction" here in the traditional sense. They are simply participating in a transactional chain where only the middlemen (MMs) make money and both the actual seller (say ADXS) and buyers (actual investors) lose. Not to mention the primary argument of hedge funds using HFT to create and amplify unequal access to the market.

Creating liquidity for the market (an amorphous group of unknown individuals) is a dubious claim at best but is complete drivel in reality. HFT trading algorithms are coded by the brightest software engineers and the rules underlying them are written by the smartest business experts. There is no way anyone in government can regulate it at the level of detail, in a manner that would be "fair" to everyone. Its existence needs to be ended.

The sad news is that it will never happen.