PLEDGE NOW
Private Stocks And 'Dark Pools' In American Finance

Dark pools – private stock trading platforms not available to the public – are under investigation by the SEC. We look at inequities in the stock market and what they mean for public investors.

In this file photo, Securities and Exchange Commission (SEC) Chair Mary Jo White attends the meeting of the Financial Stability Oversight Council (FSOC), Thursday, April 25, 2013, at the Treasury Department in Washington. (AP)

In this file photo, Securities and Exchange Commission (SEC) Chair Mary Jo White attends the meeting of the Financial Stability Oversight Council (FSOC), Thursday, April 25, 2013, at the Treasury Department in Washington. (AP)

We don’t want to be “shocked, shocked” that the US stock market is not kindergarten.  That just maybe not everything is perfectly fair and clean and open at every moment.  We get that.  On the other hand, Wall Street is supposed to be the great engine of American investment.  And it is where an awful lot of people’s savings – one way or another – end up.  College savings.  Retirements.  And they expect the system not to be rigged.  But maybe it is.  Everybody’s talking “dark pools” these days.  This hour On Point:  Wall Street’s “dark pools” – where you don’t know what’s going on.

— Tom Ashbrook

Guests

Scott Patterson, financial regulation reporter for The Wall Street Journal. Author of “Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market.” (@pattersonscott)

Joshua Brown, financial adviser at Ritholtz Wealth Management. Author of “Backstage Wall Street” and “Clash of the Financial Pundits.” (@ReformedBroker)

Shah Gilanicontributing editor at Money Morning and the Money Map Report, contributor at Forbes. (@theShahGilani)

From Tom’s Reading List

The Wall Street Journal: ‘Dark Pools’ Face New SEC Probe — “The Securities and Exchange Commission is investigating a number of big ‘dark pools,’ according to people familiar with the probes, as stock-market regulators ramp up pressure on the private trading venues. Investigators are exploring whether the trading systems are properly disclosing to clients how they operate, treating all investors fairly and protecting confidential client information, among other concerns, the people said.”

The Reformed Broker: “The stock market is a giant distraction to the business of investing.” — “The stock market is a derivative of the value of corporate America. The intrinsic value of a corporation can be estimated by the dividend yield when you purchase the stock and the subsequent earnings growth. It is corporate America that creates value; the stock market itself creates none. In fact, the stock market subtracts value, due to all the costs we pay to play the game. It’s a little bit like the casino, one might say. And I say that advisedly.”

Bloomberg: Dark Pools Take Larger Share of Trades Amid SEC Scrutiny — “Shares changing hands in private venues such as dark pools accounted for 40.4 percent of total share volume on June 10, according to data compiled by Bloomberg. That’s the most since 41.7 percent took place off-exchange on June 22, 2012. The three biggest exchange companies each matched about 20 percent of trading on June 10.”

Please follow our community rules when engaging in comment discussion on this site.
ONPOINT
TODAY
May 3, 2016
Geri Taylor, camera in tow, at the Hoover Dam in 2014. Photography had been a sideline for 30 years, but now she could really devote time to it.
Courtesy, New York Times. MICHAEL KIRBY SMITH FOR THE NEW YORK TIMES.

We look at how one women prepares for the full onset of Alzheimer’s disease.

May 3, 2016
IMAGE DISTRIBUTED FOR ALDI - Grocery shoppers experience ALDI during the grand opening of the first of eight Southern California locations on Thursday, March 24, 2016, in Moreno Valley, Calif. ALDI, one of America's favorite grocery stores, will open approximately 45 stores in Southern California by the end of 2016. (Photo by Casey Rodgers/Invision for ALDI/AP Images)

From chicken wings to kale smoothies, we look at what we eat, and how challenging it is to eat well in America. Plus, what we’re learning about how our bodies fight to keep weight off.

RECENT
SHOWS
May 2, 2016
ADVANCE FOR MONDAY, MAY 2, 2016 AND THEREAFTER - In this April 19, 2016 photo, Laurie Millan, a para-professional and tutor, works with a student during an after school tutoring session at San Francisco International High School, in San Francisco. While some districts in numerous states have discouraged migrant minors from Central America from enrolling in their schools, the school accommodated its youths by rewriting young-adult novels at a basic level to spark the newcomers' interest in reading.  (AP Photo/Jeff Chiu)

Is grit the secret sauce that drives success? More important than both talent and intellect? We’re talking the power and limits of grit.

 
May 2, 2016
A man walks on the rail tracks of a train station turned into a makeshift camp crowded by migrants and refugees, at the northern Greek border point of Idomeni, Greece, Friday, April 29, 2016. Many thousands of migrants remain at the Greek border with Macedonia, hoping that the border crossing will reopen, allowing them to move north into central Europe. (AP Photo/Gregorio Borgia)

A top former US diplomat says refugees and tribalism are pulling Europe apart and that the US needs to get involved- to help Europe by helping refugees.

On Point Blog
On Point Blog
‘Embedded’: How Violent Gangs Are Terrorizing El Salvador
Thursday, Apr 14, 2016

NPR’s Kelly McEvers on her reporting in El Salvador for the podcast Embedded, and how gang killings brought San Salvador’s bus service to a halt.

More »
Comment
 
That Cheap Dress On Facebook? It Isn't Worth It
Monday, Apr 11, 2016

Know those shockingly cheap clothes you see advertised on Facebook? There’s a catch.

More »
Comment
 
The Boston Globe Imagines — And Rejects — A President Trump Front Page
Monday, Apr 11, 2016

The Boston Globe editorial page imagines — and rejects — President Donald Trump.

More »
Comment