KNOWLEDGE IS SALVATION: INFORMING INVESTORS BY REGULATING DISCLOSURES TO SAFEGUARD BEST EXECUTION

Command and control of information—knowledge—sustain the powerful over the ill informed.  In the securities industry, informational disparities and advantages translate into massive gains and catastrophic losses. Today, the world of high-frequency trading has emerged from the shadows and sparked a technological battle between those who are informed and those who are not. Regulators, industry leaders, and scholars have continuously addressed questions hovering around high-frequency trading since the release of Michael Lewis’s book, Flash Boys. Firms engaging in high-frequency trading use advanced technologies, such as fiber optics, co-location, and advanced algorithms, to implement their trading strategies. Technology allows high-frequency traders to receive and transmit data at an extremely high rate. By doing so, they swiftly execute trades based on information that they see milliseconds before other market players—because of their technology.

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