Attorney general announces investigation into high-speed stock trades
WASHINGTON -- Atty. Gen. Eric H. Holder Jr. announced Friday that the Justice Department is investigating the practice of high-speed trading on the stock exchanges.
Holder, in testimony prepared for delivery before the House Appropriations Committee, said the Justice Department is investigating the use of computer algorithms and ultra-high-speed data networks to execute trades as a possible violation of antitrust laws.
Firms that use such tactics, employing physicists and other scientists to predict changes in the markets sometimes only seconds in advance, have been around for more than three decades. But a new book by Michael Lewis, “Flash Boys,” has shed new light on the practice.
Holder, who has been under pressure from Democrats to crack down on Wall Street practices that hurt consumers and small investors, used the scheduled congressional hearing on the Justice Department’s budget to make the announcement.
“In the financial sector, concerns have been raised recently about a practice called ‘high-frequency trading,’” Holder’s remarks said. “I can confirm that we at the Justice Department are investigating this practice to determine whether it violates insider trading laws.
“The Department is committed to ensuring the integrity of our financial markets -- and we are determined to follow this investigation wherever the facts and the law may lead.”
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