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Crapshoot Investing: How Tech-Savvy Traders and Clueless Regulators Turned the Stock Market into a Casino by Jim McTague

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21. Letter Bomb

When Michael Cembalest talked about the market, people paid close attention. The chief investment officer at JP Morgan Private Bank oversaw close to $1 trillion in investments. His opinion mattered. So when he was highly critical of certain aspects of high-frequency trading (HFT) in his biweekly “Eye on the Market” letter to his clients on July 13, 2010, it caused a sensation on Wall Street and in Washington, DC, as well.

Cembalest asserted that HFT was eroding confidence in the equities market and that the Securities and Exchange Commission (SEC) needed to take immediate steps to correct this disturbing trend.

Jim Cramer, the animated host of CNBC’s popular Mad Money show, got a copy of the letter and discussed it at length on ...

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