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VOL. 129 | NO. 67 | Monday, April 07, 2014

Holder: Justice Investigating High-Speed Trading

STEVE ROTHWELL | AP Markets Writer

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The Department of Justice is investigating high-frequency stock trading to see if any of the practices violate insider trading laws, U.S. Attorney General Eric Holder said Friday.

Brokerage firms use high-frequency trading to get a jump on their competitors. Powerful computers analyze market information and then execute buy and sell orders for stocks within a fraction of a second.

"The Department is committed to ensuring the integrity of our financial markets - and we are determined to follow this investigation wherever the facts and the law may lead," Holder told a House hearing in prepared remarks.

The practice has come under increasing scrutiny in recent months. The FBI confirmed this week that it has been investigating high-frequency trading firms for about a year. The Wall Street Journal reported Tuesday that investigators were examining the practice of placing a group of trades and then canceling them to create the false appearance of market activity.

New York Attorney General Eric Schneiderman has also campaigned against high-frequency stock trading, saying it gives firms an unfair advantage and erodes public confidence in the stock market. The Securities and Exchange Commission is also carrying out a number of active investigations into the practice, SEC Chairman Mary Jo White told the House Committee on Appropriations on Tuesday.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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