This note will illuminate the relatively unknown highfrequency trading industry. First, it will examine the state of the industry, in context with the flash crash of May 6, 2010 when a single trader in Kansas City sent the U.S. securities markets into a tailspin. Next, it will explain why the hodgepodge of regulations struggling to control this industry is entirely inadequate to prevent another crash. Finally, the authors suggest a better solution-relatively noninvasive controls that could be put in place to prevent future flash crashes and restore investor confidence.
High-Frequency Trading and the Flash Crash: Structural Weaknesses in the Securities Markets and Proposed Regulatory Responses,
8 Hastings Bus L.J. 445
Available at: https://repository.uchastings.edu/hastings_business_law_journal/vol8/iss2/5