In the wake of the 2008 market crash, small investors have become increasingly educated about the structural and institutional drivers of extreme market volatility: automatic, computerized trading techniques over which the small, individual stakeholder has little knowledge or control. Most prominent among these market innovations has been the advent of computerized, high-frequency trading (HFT), driven by mathematical algorithms.
In her thoughtful and innovative comment, Too Fast, Too Frequent? High-Frequency Trading and Securities Class Actions, Tara E. Levens explores the interesting question whether the prevalence of HFT techniques resulting in massive financial losses to small-stake investors will open the door to new securities class actions. Her general conclusion is that current legal theories undergirding various types of securities law violations are mismatched with the harms induced by HFT. Consequently, Levens attempts to formulate a jurisprudence for new securities class actions based on the unique injuries resulting from HFT manipulation. In essence, Levens’ task is a riff on the theme of fitting new wine into old bottles.