Politics, Politics, Politics! And The Clinton HFT Tax That Will Never Be

Politics, Politics, Politics, Politics, Politics!

The political election race is in full swing, with less than 100 days until election day. Enjoy the spectacle! While supporters of both candidates are extremely vocal on why the stakes have never been higher in picking the next leader of our country (they are probably right), and that you all should be very, very worried, this morning we want to assure you of one thing you really do not have to worry about – an HFT financial transaction tax!

 Hillary Clinton has been proposing an HFT-specific transaction tax for nearly six months now. Her plan is short on details, but its supposedly will address the high frequency trading that has:

“unnecessarily burdened our markets and enabled unfair and abusive trading strategies that often capitalize on a ‘two-tiered’ market structure with obsolete rules.”


It’s all talk. It is a “shiny lure” meant to achieve populist optics, and nothing will come of such a proposal.


This is why we think so:

We wrote a note to you over a year ago titled The Curious Story of the HFT Firms and Rahm Emanuel. It highlighted this Chicago Tribune article which detailed the fundraising of several HFT firms’ fundraising efforts for Rahm Emanuel – $14 million worth. Emanuel subsequently traveled to Washington on a DRW Trading private jet to meet with the CFTC’s Gary Gensler to lobby that small firms should be left out of strict capital requirements being considered under Dodd Frank. These small firms were subsequently left out of those requirements.

Here are a few tidbits from that article:

  • Three Chicago Trading Firms (DRW Trading, Chicago Trading Company, and Infinium Capital) traveled to Washington with Rahm Emanuel to lobby the CFTC to not create rules that would require them to hold more capital in their high frequency trading businesses. They had paid Emanuel $182,000. Don Wilson flew Emanuel to Washington for the meeting on his own private jet.
  • When the CFTC drafted the final rules a few months later, these firms got the rules re-written for their favor. The three firms paid Emanuel an additional $187,000. Two other Chicago firms not at that meeting, Peak 6 and Chopper Trading, gave Emanuel an additional $334,000.
  • The Chicago elite trading firms are actually responsible for more than $14 million of the $30 million Emanuel has raised since fall 2010.
  • CFTC general counsel, Dan Berkovitz, had this to say about the Emanuel – CFTC meeting: “there was nothing where we made decisions based politically, but… when a person like that comes in, it does make you think about it considerably.”
  • After the meeting, Emanuel held fundraisers at the posh homes of Chopper Trading’s and DRW’s CEO’s  homes. Two dozen additional checks were deposited in Mayor Emanuel’s account.


Remember, Emanuel was Obama’s Chief of Staff during the financial crisis, after which he became Mayor of Chicago.

Also, Gensler is now the Clinton campaign’s Chief Financial Officer, and if she is elected, will likely be her choice for Treasury Secretary.

And Rajiv Fernando, the ex-CEO of Chopper Trading, is a Clinton Super Delegate in Illinois, and before that was placed at Clinton’s personal insistence on its International Security Advisory Board (he subsequently resigned from that position after the controversy broke), after giving between $1-5 million to the Clinton Foundation.

We are often implored in the trading business to “do the math”. And so we do, and we ask you to do the same. Do you believe it is likely, given all this Emanuel – Genseler – Fernando – HFT business, that a Clinton presidency will institute an HFT-targeted financial transactions tax?


Follow the money. And enjoy this Mel Brooks History of the World YouTube clip – Politics, Politics, Politics, Politics, Politics!