Following the publication of Michael Lewis’ new book, Flash Boys: A Wall Street Revolt, plaintiffs’ lawyers and government regulators have increasingly focused their attention on financial institutions participating in high frequency trading (“HFT”). Less than three weeks after the release of Flash Boys, private plaintiffs filed a class action lawsuit against 27 financial services firms and 14 national securities exchanges (with additional defendants likely to be named later) alleging that defendants’ HFT practices violated the antifraud provisions of the federal securities laws. Plaintiffs’ lawyers also filed a separate action with similar allegations against The CME Group, Inc. and The Board of Trade of the City of Chicago.
In addition, the Securities and Exchange Commission, Commodity Futures Trading Commission, and Federal Bureau of Investigation announced that they were actively investigating HFT practices. The New York State Attorney General is currently pursuing an initiative to crack down on what he referred to as ”predatory practices” in the HFT business. Although the outcome of these lawsuits and investigations is unknown, it is clear that trading firms, brokers, and exchanges engaged in HFT activity are under increasing pressure from plaintiffs’ lawyers, federal and state regulators, and criminal law enforcement authorities.
Please join us as Mayer Brown partners Joseph De Simone, Jerome Roche, and Matthew Rossi discuss these new developments in HFT.