Not Enough Bullets

The high frequency trading firms are ramping up their lobbying efforts to keep their front-running of markets legal:

The high-frequency trading industry is stepping out of the shadows in Washington.

Closely held companies with undisclosed profits and obscure names like Getco LLC, Hard Eight Futures LLC and Quantlab Financial LLC, are beginning to act more like Wall Street banks, cutting checks to politicians, forming trade groups and hiring lobbyists and ex-regulators. They’re looking to fend off tighter rules and appease lawmakers who say the firms disadvantage small investors and contribute to wild swings in stock prices.

While the companies, which use high-powered computers to execute thousands of trades in milliseconds, aren’t approaching the big banks in Washington spending, they have more than quadrupled their political giving over the last four years, a Bloomberg News analysis shows. The top recipients include Eric Cantor, set to become House majority leader, and several incoming senators who won in last week’s Republican rout.

Among other things, they are worried that the SEC will limit their ability to manipulate stocks by doing things like submitting large number of orders and then canceling them.