An another dramatic example of how partisanship is helping big business and Wall Street at the expense of the average American, SEC commissioners have blocked the appointment of Nobel Laureate economist Joseph Stiglitz to an SEC advisory panel on financial market reforms. Stiglitz has been one of the few high-profile figures to criticize how U.S. financial markets are run. Given he has offered strong argumentation and evidence to support his contention that many aspects of the current system such as HFT are unfair and “rigged” to benefit large financial firms, it’s not surprising his appointment to the SEC reform panel was opposed by the Wall Street-friendly members of the commission.
Blocking a Nobel prize winner — one of the smartest and most knowledgeable people in the world regarding the subject at hand — from joining the SEC Wall Street reform panel makes it very clear that commissioner Daniel Gallagher‘s real intent is to make sure the panel doesn’t really reform anything on Wall Street. And, of course, to make sure that the big banks keep making large contributions to the lawmakers who protect them from real reform.
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Statement from Stiglitz
“I think they may not have felt comfortable with somebody who was not in one way or another owned by the industry,” Stiglitz said in a telephone interview with Bloomberg on Monday.
Not surprisingly, Gallagher declined to comment regarding appointments to the panel, as did Gina Talamona, a spokeswoman for SEC Chair White.
Brad Katsuyama will be named to SEC panel
Although the identities of the five members of the panel have not yet been revealed, the panel is expected to include representatives of Wall Street firms and academic researchers. According to two Bloomberg sources, IEX Corp. Chief Executive Officer Brad Katsuyama is going to be named to the panel.
This is a small ray of good news for those interested in real reform on Wall Street, as Katsuyama vaulted to public fame in “Flash Boys,” Michael Lewis’s recent book about high-frequency trading. Katsuyama founded the IEX trading platform to try and level the playing field for investors by eliminating opportunities for the fastest firms to trade in front of slower ones. He has also publicly stated he believes the government should require greater transparency into the operations of trading venues.