Today in the Wall Street Journal, Goldman Sachs calls for more regulation and says everyone should support IEX, the new exchange started by Brad Katsuyama and featured in Flash Boys by Michael Lewis.
The article references in internal email that says:
"While we think that a regulatory response may be needed to address these market structure issues, it would be best for the overall market if IEX achieved critical mass, even if that results in reduced volumes in our US dark pool, Sigma X."
It took forever, but it finally happend. Back in 2010 I wrote this post saying that more regulation would not happen on Wall Street until the Wall Street guys decided it would be good for them. At the time I thought that they would want it because individual investors would be leaving the market. Any maybe that is why they are calling for it now.
Another potential motivation comes out in Flash Boys however. Goldman Sachs is way behind the other high frequency traders. This could be because they cannot get or keep good programming tallent -- because they got the FBI to jail one former employee. They also show their neaderthal tendencies when they refuse to participate in the open source community and proclaim all open source code to be proprietary to them. So they were losing to the other scammers -- what a perfect time to call for more regulation.