Do you remember Haim Bodek?  We first wrote about Haim back in October 2012 in a post titled “Who is Haim Bodek?”.  Haim was the first whistleblower to expose how a major stock exchange (Direct Edge) created an order type (Hide Not Slide) that provided HFT firms with unfair advantages that propelled them to the exchanges’ best prices at investors’ expense.  Back in 2012, the financial media was all over this story and market structure savvy journalists like Scott Patterson were able to shine a light on these shady exchange practices.  Scott’s article “How “Hide Not Slide” Orders Work”  was a virtual blueprint in how unsuspecting investors were (more…)

  NYSE was fined $14 million yesterday by the SEC for five serious violations.  This note will focus on the fifth violation since we think it is the most egregious one: NYSE and American’s Rules Failed to State That Pegging Interest Orders Created Possibility of Detection of Prices of Non-Displayed Depth Liquidity. While we have noted many examples in the past about information leakage by the stock exchanges, this is the first time that the SEC has fined an exchange for leaking confidential client information. Here is what was going on at the NYSE between 2008 and 2015: – Floor brokers were permitted to enter “pegging (more…)