Today's issue of Politico Morning Money leads off with Thorn Run's Jason Rosenstock and today's edition of the TRP Financial Services Report. Responding to the furor surrounding high frequency trading that has come under the spotlight in a new book by author Michael Lewis, Rosenstock explores the policy implications of the recent dust-up. Noting that there could be a similar reaction in Congress to that of the AIG bonuses in the shadow of their federal bailout, Rosenstock suggests that the likelihood legislative remedies gaining momentum are small, but that the industry needs to be prepared to stem possible DOJ, SEC, and CFTC enforcement actions.
Politico: How Long Will the "Lewis" Effect Last?
Thorn Run Partner’s Jason Rosenstock in a note going out this a.m. “For an industry that prides itself on speed, this past week saw a high intensity backlash for high frequency traders that began with sensationalized revelations intended to sell books and concluded with news of a DOJ investigation … Similar to the furor surrounding the AIG bonuses in the shadow of their federal bailout, it is likely that Congress, as a whole, will quickly turn its attention elsewhere, especially once Michael Lewis’ book tour is over …
“[T]he likelihood of legislative remedies such as Congressman DeFazio’s transaction tax gaining momentum are small. However, it is likely that a few members, both in the House and the Senate will remain engaged on this issue and they will continue to pressure the Department of Justice, the SEC, and the CFTC to focus their resources on policing the issue”
You can find the entire article online in Politico Morning Money, featured on the Politico website.