New York Law Journal Publishes Article by Three Curtis Lawyers on High-Frequency Trading

An article by Curtis Litigation partner Eliot Lauer, counsel Jason Gottlieb, and associate Alyssa Astiz entitled, 'Stay Afloat in the New Wave of High-Frequency Trading Actions,' was published in the February 25, 2013 New York Law Journal.

The authors discuss the magnified interest in high-frequency trading and outline the new defense tactics suited to high-frequency trading. High-frequency trading — computerized trading based on complex algorithms designed to rapidly analyze the financial markets and execute orders — now accounts for approximately one-half of all U.S. equity trading volume and approximately sixty percent of futures contracts trading on the Chicago Mercantile Exchange. The SEC, FINRA, and the CFTC have begun to investigate whether some high-frequency trading practices may actually be market manipulation devices, and the CFTC has been granted expanded authority under Dodd-Frank to regulate this area. The Senate Banking Committee has conducted hearings to determine whether legislative reform targeted at high-frequency trading is warranted. Initial investigations have revealed abusive momentum-driven trading and instances of 'layering,' 'quote-stuffing,' and 'spoofing' — practices that can artificially manipulate security prices.

The authors conclude that, as legislators and regulators continue to prioritize high-frequency trading, there will be a substantial increase in enforcement activity aimed at curbing unfair high-frequency trading practices and ensuring a level playing field in the financial markets.