Mark Cuban, the outspoken business magnate and owner of the Dallas Mavericks, says the stock market no longer is safe.
"The markets for equities of all kinds had evolved to a platform for hackers," Cuban said in an e-mail exchange with the Wall Street Journal published Tuesday.
Cuban said that after the flash crash of the stock market in May of 2010, he was alarmed when he looked into high-frequency trading, the automated form of computer-driven trading that caused the flash crash and constitutes a majority of trading on the stock market.
"[High-frequency traders] are the ultimate hackers," Cuban told the Journal. "They’re running software programs that have one goal, and that’s to exploit the trading systems as early and often as possible. ... When software programs are trying to outsmart other software programs and hack the world's trading platforms, that is a recipe for disaster."
In a blog post in 2010 after the flash crash, Cuban compared high-frequency traders to criminals. He wrote: "A hacker wants to jump in front of your shopping cart and grab your credit card and then sell it. A high frequency trader wants to jump in front of your trade and then sell that stock to you."
High-frequency traders sell stocks nearly as soon as they buy them in order to manipulate small price differences in the stock market. Joseph Saluzzi, the author of a book criticizing high-frequency trading, said in a recent interview with The Huffington Post that high-frequency trading has turned the stock market from a center of capital raising and formation "into a casino."
The government hasn't been able to do much to prevent future flash crashes. Former SEC lawyers recently told The Huffington Post that the SEC does not currently have the ability to fully monitor high-frequency trading.
Of course, Cuban may have more personal reasons to dislike the stock market. Most recently, he got burned by the Facebook IPO after buying Facebook shares on the open market and selling them at a loss.
It's unclear what Cuban's current holdings in the stock market are. But he wrote in a blog post in August 2010 that though he still was holding stocks, he had been a net seller of stocks for more than a year.
Earlier on HuffPost:
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