Nobel Prize-winning economist Joseph Stiglitz, who has proposed a tax on high-frequency trading (HFT), has been blocked from participating in an SEC panel being created to advise regulators on issues related to dark pools and HFT, according to media reports.
Stiglitz, who was nominated as a panel member by Democrat SEC commissioner Luis Aguilar, saw his nomination opposed by others at the SEC due to his belief that HFT can be damaging to markets and should be taxed, Bloomberg News reports, citing unnamed ‘people familiar with the matter’. Daniel Gallagher, a Republican SEC commissioner who has frequently called for less regulation of Wall Street, has also opposed Stiglitz’s nomination to the panel.
‘I think they may not have felt comfortable with somebody who was not in one way or another owned by the industry,’ Stiglitz says in a phone interview with Bloomberg. ‘Financial markets are important and I have been worried about the way they have been working and whether they are serving the American economy. I was willing to serve. The next thing I knew, I was told, You didn’t get it.’
The SEC, which has two Republican commissioners, two Democrat commissioners and chairman Mary Jo White, who acts as an independent, has been slowed by infighting as it seeks to form a 15-member panel to study HFT, which makes up more than half of US trading volume.
Republican commissioner Michael Piwowar earlier opposed the nomination of former Federal Reserve vice chairman Roger Ferguson because he didn’t want the Fed to have ‘more undue influence in areas in which it has no particular knowledge or expertise,’ Bloomberg reports, citing Piwowar.
White last year announced she would emphasize HFT as an area of scrutiny for the SEC by appointing more staff to scrutinize and police it, upgrading technology and looking at possible regulations to curb some of the advantages and potential abuses by companies that engage in the practice.
