This week, BATS reported that over a four-year period (2008 through Jan. 4, 2013), they overcharged members $420,000. This came from short-sale trades not always being executed at the best available price–a securities law violation.?
The exchange’s defense was a computer glitch and upon detecting it, they immediately reported it. It has also said the market rules on regulation were too complex.
BATS plans to put together a compensation plan and will work with the SEC to do so. ?
In situations like this, it doesn’t exactly make traders or investors want to embrace electronic trading.
Since the story came out, there’s a been a number of different takes on it. Was the glitch a regulatory problem? Is electronic trading too hard? Was it really just a system problem??
Take a look.
The first one concerning electronic trading appears to be CNBC’s Thursday’s story, “BATS’ Latest Issue Bad for Electronic Trading.”
Maybe stock trading is just too complex? Yahoo! explores this with “BATS Glitch Shows Stock Trading Is Too Complex, Not Crooked.”
The Trade talks about the potential compensation in “BATS looks to compensate after long-term system error.”
Bloomberg and MarketWatch talk about the regulation problem in “Bats Blaming Market Rules as Calls of Overhaul Grow” and “SEC effectiveness questioned after BATS error.”
The New York Times look at it from an exchange perspective with “Errors Mount at High-Speed Exchanges in New Year.”
And this one may be one of the scarier ones. Oops, BATS doesn’t have a CIO.
The Wall Street Journal takes a look at this with “BATS: Yes, We Have No CIO.”