• 11 Jan 2013 at 1:07 PM

BATS Owns It

If you’re looking for contrition from BATS Global Markets following its revelation that it’s been screwing up hundreds of thousands of trades and violating rules for about four years, you’ll be disappointed. The latest exchange forced to publicly admit incompetence says it’s going to try to fix things, but that customers (and, presumably, the SEC) are just going to have to get used to the occasional snafu.

“This is part of the business of being an exchange in an electronic environment,” chief executive Joe Ratterman said in an interview at the company’s Lenexa, Kan., headquarters. “You have to accept that you are going to find issues if you are diligent in looking for them.”

“Handling orders right is a challenging problem to solve,” Mr. Ratterman said.

All of this did not go over well at all with the guy manning The News Hub over at wsj.com, who points out that “handling orders right” is exactly the business that BATS is in. But he then goes off the rails a bit and suggests that we just junk all of this electronic trading nonsense and return to the world of open outcry.

Unfortunately for BATS, the SEC, while thrilled with the exchange’s ratting on itself, is perhaps less thrilled with its somewhat shoulder-shruggy response to the whole thing, and is mulling some sort of action against it. And the agency isn’t likely to be swayed by this argument:

Officials at BATS and other exchanges have said that the price-sliding orders were developed to comply with regulations. BATS Chief Executive Joe Ratterman said in an interview Thursday morning that its technology problems are “indicative of complexity in the markets,” and that regulators should examine how the complexity leads to errors.

Bats CEO says trade problems are part of the business [WSJ via Financial News]
Now Up to BATS: Damage Control [WSJ]
Video – BATS CEO: Trade Problems ‘Part of the Business’ [WSJ]
SEC Concerned About Other Exchanges [WSJ]
Bats Blaming Market Rules as Calls of Overhaul Grow [Bloomberg]

18 comments (hidden to protect delicate sensibilities)
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Comments (18)

  1. Posted by Jon's Chihuahua | January 11, 2013 at 1:46 PM

    That picture of bats is scaring me Jon, take it down please.

  2. Posted by Guest | January 11, 2013 at 1:46 PM

    Wasn't this on the write-offs?

    I'd say you're better than this…but we both know I'd be lying

  3. Posted by Kuntao Kunaya | January 11, 2013 at 2:25 PM

    I think this is a tipping point, a warning to us from all sides. Futures, stocks,Spot Forex,Options,you name it. Youve all heard of point shaving in pro and college sports,right? Imagine the "shaving that goes on in one day on an exchange. Sadly, another thing that the buy and holders have on us traders. This is the bottom line. If Apple computer closed at $500 today up from $33 5 years ago. Do we know that the true price might not be $1000 without all the" snips and crumbs" falling off the floor? Or……that it would have gotten to $500 in half the time? See, you cant have an oil leak in your engine, and think that if you keep "topping it off" the problem will stay "maintained." Dont be surprised to see more flash crashes and maybe news like this actually knocking the market down 4-500 points like in the old days. You remember those days in the stock market? When news actually moved the markets? LOL

  4. Posted by guest | January 11, 2013 at 2:31 PM

    When's the IPO? We are ready to enter multiple buy orders.

    - UBS execution desk

  5. Posted by Anonymous Trader | January 11, 2013 at 2:58 PM

    Among the most retard comments penned in Dealbreaker history.

  6. Posted by VVA | January 11, 2013 at 2:58 PM

    Witty and insightful!

    - Lover of life, foodie, business professional, dedicated husband, and above all else Vineyard Vines aficionado

  7. Posted by Kweku Adoboli | January 11, 2013 at 3:00 PM

    Shut up Kuntao!!

    Sorry guys, my idiot cousin.

  8. Posted by Guest | January 11, 2013 at 3:12 PM

    To summarize this post. Shaving in college is different in the pros. Get your oil changed every 3k miles, and you can get an Apple computer 1/2 off if you buy a 5 year old model.

  9. Posted by Guest | January 11, 2013 at 5:15 PM

    You are right. Up to and including your comment! The past 4 years have all been a bad dream.

  10. Posted by Jennifer | March 24, 2013 at 9:05 PM

    First time I've heard of BATS and hope it's the last…

  11. Posted by Jonny | April 28, 2013 at 2:46 AM

    Global marketing is changes to revolution in our lives. You have provided exceptional info about this content.
    Let's go.

  12. Posted by sohbet | May 12, 2013 at 6:22 PM

    telling these little stories, here's a good idea: Have a point. It makes it so much more interesting for the listener.

  13. Posted by sohbet | July 8, 2013 at 9:22 PM

    officers to investigate Blackstone's fishy financial transactions, but they wound up giving them

  14. Posted by Hector Knox | August 27, 2013 at 8:03 PM

    Thanks for including the statement from the interview of Mr.Ratterman. Atleast that has been explained the reason.

  15. Posted by Syamsul Alam | October 27, 2013 at 12:25 AM

    Thank you for share this good article. I agree that the problem should be resolved quickly. If not, the problem will get bigger even than our ability to solve problems.

  16. Posted by Arwana Red | January 16, 2014 at 12:23 PM

    thanks for sharing ,
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  17. Posted by sohbet | March 29, 2014 at 4:05 PM

    Thanks for including the statement from the interview of Mr.Ratterman. Atleast that has been explained the reason

  18. Posted by Option Bot Review | April 23, 2014 at 10:33 AM

    So many should be investigated yet these illegal games still continue in the market.