Overview
In an opinion Friday, the Second Circuit affirmed Judge Forrest's dismissal of a complaint (see our prior coverage here) accusing stock exchanges of improperly allowing high-frequency traders to pay to obtain and trade on market data faster than other investors -- the conduct at issue in the Michael Lewis book "Flash Boys." The Second Circuit agreed that the claims were preempted by the SEC having found the underlying conduct permissible: "From the Exchange Act – which focuses on the need to create a national market system – we can infer that Congress intended for the regulations governing national securities exchanges and securities information processors to be uniform. Allowing conflicting judicial interpretation of the SEC requirements pursuant to state contract law would stand as an obstacle to the uniformity that Congress intended to create for the national market system."
