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Former trader to Congress: stock markets 'in a crisis'

September 20, 2012|By Andrew Tangel
  • Sen. Jack Reed (D-R.I.) is holding a hearing on computerized trading.
Sen. Jack Reed (D-R.I.) is holding a hearing on computerized trading. (Mannie Garcia /Bloomberg…)

A former Wall Street trader plans to tell a congressional panel investigating computerized trading that the stock market is in a "crisis."

"U.S. equity markets are in dire straits," David Lauer, now a consultant with the advocacy group Better Markets Inc., said in his prepared testimony. "We are truly in a crisis. Over the past three decades a technological revolution has swept over Wall Street."

A Senate banking subcomittee holds a hearing Thursday on how regulations might rein in lightning-fast trading that precipitated the flash crash of 2010.

Trading technology on Wall Street has emerged as a major issue this year with high-profile technical glitches that marred Facebook's initial public offering and nearly felled Knight Capital Group, a major brokerage.

Also testifying: Larry Tabb, chief executive of the TABB Group, a Wall Street consulting and research firm; Andy Brooks, head of U.S. equity trading at T. Rowe Price;  Chris Concannon, partner and executive vice president of Virtu Financial.

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