working on it, heres full story U.S. stock exchanges are shielded from any liability for investor losses tied to the thousands of trades canceled on May 6, a senior Nasdaq OMX Group Inc. (NDAQ) executive said Wednesday. Chief Financial Officer Adena Friedman said exchanges have "regulatory immunity" because the final decision on "busting" trades was made with the blessing of regulators. "The answer is no, we don't have liability," said Friedman when asked about the potential financial fallout at an industry conference. "When we made the decision around the [trade] breaks, that was made with all the exchanges and the [Securities and Exchange Commission] on the phone," said Friedman. Exchange leaders held an emergency conference call with regulators late on May 6 to address fallout from the dramatic market swings. Nasdaq OMX said Tuesday it had canceled more than 10,000 trades at the height of last Thursday's market volatility, when the Dow Jones Industrial Average fell almost 1,000 points before quickly regaining much of its losses. NYSE Arca, the electronic platform run by NYSE Euronext (NYX), cancelled 4,986 transactions across 296 symbols, according to an exchange official. The New York Stock Exchange broke no trades after triggering a so-called "slow mode" to calm price volatility. BATS Global Markets busted 540 trades made between 2:40 p.m. and 3:00 p.m. EDT Thursday. Direct Edge canceled 3,500 to 4,000 transactions across a list of 286 symbols, according to a spokesman. Representatives for BATS, Direct Edge and NYSE Euronext declined comment Wednesday as to exchanges' potential liability for voided transactions. Representatives of the SEC and major U.S. exchanges met after the close on May 6 to decide which trades would be allowed to stand in the aftermath of the so-called "flash crash." The decision was made to cancel all trades executed at prices that were more than 60% above or below those printed before 2:40 p.m. EDT. The 60% cutoff rankled some investors, who saw it as arbitrary. Some lost money on trades made amid the market swoon. Chris Nagy, managing director of order routing, sales and strategy at retail brokerage firm TD Ameritrade Holding Corp. (AMTD), said in an interview Tuesday that the 60% figure was discouraging and "artificially derived." "To our clients, that was not a positive," he said. "It would've saved our clients a lot of money had that number gone to 30%." On Tuesday, NYSE Euronext Chief Operating Officer Lawrence Leibowitz said that his exchange had received no appeals yet contesting busted trades.
Vast majority of the erroneous trades occurred at the NASDAQ A smart lawyer wouldn't go after NASDAQ for busted trades. A smart lawyer would hammer the NASDAQ for allowing your trades to be broadcast to those who are able to pay hefty "data fees" and "co-location". Bunch of BS. that's like the bank saying they own your SSN and Drivers License info and then selling the personal info to credit card scammers. Lots of traders lost big money. All it takes is one really pissed off mofo who lost his ass and now has nothing to lose. If the republicans were in charge the SEC would still be busy watching porn and a trader would have no chance to do anything. Under Obama the SEC appears to want to put its pants back on. A dedicated pissed trader would spend time with his rep. and the SEC. With the new administration looking into how wall st. has screwed the tax payer, the NASDAQ isn't in a position to wax philosophical on how it allows front running.
How can you see things so clearly and be so confused. Your are right I predcit the NASDAQ will get nailed on this HFT front running as part of a fraud suit. The attorneys will argue fraud is not protected by regulation. NASDAQ will settle quitely out of court. If I were not busy... I would take those cases. The SEC is wearing pants under OBAMA... don't tell me you think GS is going to get more than a few million dollar slap on the wrist. Obama is setting Cap and Trade to make millions with GS and Gore. You really need to examine your love affair.
I knew politics were not far behind on this discussion... there was substantial and significant political pressure to "fix this" either way, in the trading group that I participated in on that day, we were discussing that most trades would be busted by the end of the day because too much collective damage was being done. so there were some of us experienced traders that anticipated that outcome, it was not surprising that the house raised the limit and cancelled those trades....
If the 60% figure and the rest of the do-over is specified in Nasdaq's user agreements, BEFORE any market event, then those who trade there know the rules. If they get burnt, TS. If this was decided after the fact, fuck the Nasdaq. One set of rules, level playing field, known by everyone, in advance, or I'll just trade around you. There's enough ETFs and index funds out there to avoid giving them any fees if they choose to make up rules as they go along. They might run one market, but they are IN another market, competition for my interest, business, services, and fees. My money, my decision. Were the rules used to bust these trades spelled out in advance, yes or no? Honest truth...between historical Citi shit, BOA shit, Merrill shit, Morgan shit, Chase shit, gubmint shit, Goldman shit, bailout shit, and Fannie May shit, I am about one sixteenth inch away from total cash-out. Don't give a fuck if I start the last run THIS global economy ever sees, I am WAY past tired of this crap and I am very VERY close to taking arbitrary action over it. Note to all involved: Get your fucking act and ethics and enforcement together, like yesterday, or kiss every nickle I control goodbye. Joe down the street wants to start a small business and I trust him WAY more than I trust ANY of you. DONE talking.
Shmucks, do a little research There are clearly defined erroneous trade levels on the books of the exchanges and ecns 60% was BULLSHIT . the real #'s are a lot lower than that This was an outrage, and a fraud against those who got robbed