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    SEC Tried to Make Markets Fair. Here’s What Happened

    Two decades ago, a system for sending U.S. corporate filings over the Internet was hailed as a victory for transparency. Today, the Securities and Exchange Commission’s Edgar website is engulfed by concern over opacity. Researchers checking whether documents are distributed to investors fairly by the SEC found evidence that some paying subscribers got the information first. The commission is reviewing how data is disseminated by the service, which was activated during the Clinton administration as a way to broaden access to potentially market-moving data, a spokesman said. This is what happens when a technology designed to solve problems in the 1990s becomes the focus of scrutiny so many years later, said Manoj Narang, the chief executive officer of proprietary trader Tradeworx Inc. Thanks to high-frequency trading, every detail of how data is broadcast to U.S. markets is being reviewed in probes by the New York attorney general, the FBI and the SEC itself. More on Bloomberg here.

    SourcedFrom Sourced from: Network For Investor Action & Protection

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    The S.E.C. and Political Spending

    It’s almost Election Day. Shareholders: Do you know how the cash from companies you invest in is being spent to influence the outcomes? Unless you invest in companies that voluntarily disclose their political spending, the answer is no. Worse, the Securities and Exchange Commission — the presumed guardian of investors’ right to know how corporate executives spend shareholder money — will not lift a finger to help you find out. More in the New York Times here.

    SourcedFrom Sourced from: Network For Investor Action & Protection

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    Fast Traders Are Getting Data From SEC Seconds Early

    WASHINGTON—Hedge funds and other rapid-fire investors can get access to market-moving documents ahead of other users of the Securities and Exchange Commission’s system for distributing company filings, giving them a potential edge on the rest of the market. Two separate groups of academic researchers have documented a lag time between the moment paying subscribers, including trading firms, newswires and others, receive the filings via a direct feed from an SEC contractor and when the documents are publicly available on the agency’s website. The studies found a wide variation in the lag time, from no delay to one lasting more than a minute—a considerable advantage for computer-driven traders. The ability to get the information before it is on the SEC site can give traders precious seconds to act on the news. More in the Wall Street Journal here.

    SourcedFrom Sourced from: Network For Investor Action & Protection

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    The Debate Over Wall St. Enforcement

    How much enforcement is enough to adequately oversee Wall Street and the major banks? Make regulations too onerous, and firms won’t pursue potentially worthwhile investments for fear of huge legal bills if they are accused of violations. Too loose, and banks and brokers will run amok like schoolchildren when the teacher leaves the room, which is what happened in the years leading up to the financial crisis in 2008. The tension on regulation has been on display recently as the regulated are pushing back against the tough stance taken on corporate misconduct. Not surprisingly, the regulators have responded by threatening to crack down harder. Each side postures about the appropriate level of oversight, with no clear answer on whether we have too much or too little regulation. More in the New York Times here.

    SourcedFrom Sourced from: Network For Investor Action & Protection

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    Finra’s CARDS plan is likely to be a game changer

    Released for public comment Sept. 30, CARDS Version 2.0 is an ambitious effort by the Financial Industry Regulatory Authority Inc. to develop mega-data on the brokerage industry and its millions of customer accounts for enforcement purposes. While the regulated don’t generally share the regulator’s enthusiasm for the Comprehensive Automated Risk Data System, it is likely to be implemented. When it is, CARDS promises to be a game changer in a number of ways, including some that may impact the fiduciary debate. More on Investment News here.

    SourcedFrom Sourced from: Network For Investor Action & Protection

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