Senate Panel Will Look at Day Trading
A Senate subcommittee will hold a new hearing on the risks of day trading next week as regulatory scrutiny of the controversial industry continues.
The Senate Governmental Affairs Committee’s permanent subcommittee on investigations will hold its second day-trading hearing Feb. 24-25, following an initial hearing in mid-September.
Separately, major day-trading firms have decided not to compile an industrywide study assessing the profitability of individual day traders, according to sources.
At the Sept. 16 hearing, an industry trade group said it would release a detailed profitability analysis by year-end that would refute claims by regulators that the vast majority of individuals who try the risky, active trading strategy lose money.
But the Electronic Traders Assn. decided against doing the study because firms feared that government regulators would subpoena their records and dispute their findings, sources said.
“They’re afraid the information will be used on a selective basis to crucify them,” Bill Singer, a New York attorney who represents several firms, said Tuesday.
The industry has maintained that, after roughly six months of experience, about two-thirds of day traders make money.
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