U.S. lawmakers seek probe of day trading
(Reuters 02/12 14:19:54)
WASHINGTON, Feb 12 (Reuters) - Four key U.S. Democrats on
Friday called for a comprehensive investigation into the
controversial and increasingly popular form of investing called
day trading.
The four lawmakers asked the General Accounting Office, the
investigative arm of Congress, to conduct the probe, saying in
a letter dated Feb. 11 that they were worried by the risks of
day trading.
Day trading is the process of quickly buying and selling
stocks in hopes of cashing in on small price moves.
The signatories were Rep. John Dingell of Michigan, the
senior Democrat on the House Commerce Committee, along with Ron
Klink of Pennsylvania, Edolphus Towns of New York, and Edward
Markey of Massachusetts, the top Democrats on three House
Commerce subcommittees.
They said the Securities and Exchange Commission's current
regulations and resources may be insufficient for policing day
trading.
"We're not surprised that members of Congress would be
interested in changes that affect the finances of millions of
their constitutes," an official of the National American
Securities Administrators said.
NASAA, the umbrella group for state securities regulators,
formed a task force in January as part of a crackdown on day
trading transgressions, including unlicensed activity and
deceptive advertising.
Last week, the National Association of Securities Dealers
cautioned members that investors must be properly warned about
the risks amid unprecedented levels of day trading.
In their letter to the GAO, the four lawmakers asked for a
report on what efforts the SEC has taken to address day
trading.
They also asked about the size of the market, its rate of
growth and to what extent day trading firms extend credit to
traders or pool customer funds for additional trading.
They also want the GAO to analyze how day trading is
conducted, what is required to set up a day trading firm and
what kind of investor protections currently exist.
((Washington newsroom, 202 898-8399 Fax: 202 347-3853,
washington.equities.newsroom@reuters.com))
REUTERS |
