Citadel’s Griffin Defends HFT

Jul 9 2014 | 6:24am ET

Citadel Investment Group founder Kenneth Griffin yesterday urged Congress not to ban high-frequency trading, but to focus on regulations that would improve market stability.

Speaking at a Senate Banking Committee hearing, Griffin, whose firm does some high-frequency trading, albeit less than in previous years, said that Congress should “absolutely not” ban the practice. He called the U.S. equity markets “the fairest, most transparent, resilient and competitive” in the world, and said that HFT helps reduce market inefficiencies.

“Somebody has to keep the New York markets in line with the markets in Chicago,” he said. With HFT, “it all happens at an extremely low cost in the context of our capital markets.”

Griffin told the senators that he supports “thoughtful regulation,” noting in particular the need for more attention to dark pools. The hedge fund chief said such “alternative trading systems” need to be monitored to ensure that all investors are treated equally.

Griffin also called for increased disclosure from broker-dealers, which he said “need to have solid and robust fail-safes.”

“We need to have broker-dealers and exchanges work hand in hand to prevent aberrant orders from having an undue and unfortunate—in fact, devastating—impact on investor confidence.”

During the hearing, Sen. Mark Kirk (R-Ill.), who opposes additional HFT regulation, asked Griffin if author Michael Lewis had spoken to him about the subject. Lewis’ book, Flash Boys, has fueled much of the recent debate on HFT; Lewis has said it has “rigged” the U.S. markets.

“I’ve never spoken to Michael Lewis,” Griffin said. “He never called you?” Kirk pressed. “He did not,” Griffin responded.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.