Madoff sounds off on dark pools
I've suggested that 2013 might be big year in terms of market structure, as dark pools and high-frequency trading in particular garner more regulatory attention.
When it comes to dark pools, the big brokers will no doubt fight hard against those who think it harms price discovery and unnecessarily fragments the market. An unlikely ally has emerged in Bernard Madoff, who is serving a 10 year prison term for a massive Ponzi Scheme. He has sent the media a letter in which he voices his opposition to dark pools' practices and a lack of oversight. He thinks front-running is running rampant as well.
"The issue of electronic trading has recently been focusing on the lack of transparency of the markets with the emergence of DARK POOLS. This has now spread to the recent acquisition of the NYSE . While I have always been an advocate of electronic trading due to the efficiency the lower costs they bring o the markets, I am nit (sic) a fan of the lack of transparency the DARK POOLS create," according to his email to CNBC.
The obvious question here is whether Madoff's support is a boon or bane to the industry. Detractors of dark pools will have plenty of firepower without having to resort to the father of all Ponzi Schemes. But it is somewhat noteworthy that Madoff continues to remain relevant with the financial media, for better or worse.
- here's the article