During the 2008 financial crisis, as host of the “Daily Show,” Stewart regularly skewered big banks, market pundits and regulators. Now, he’s wading even deeper into the weeds of finance as an emphatic ally of a Reddit-sparked movement of small investors clamoring for a revolution in the U.S. stock market.
“The system was written and built for the people that are operating in it. So you’re the away team,” Stewart, 60, said in an interview. “You’re allowed access, but only at a certain level. You don’t get into the VIP room. You don’t get the platinum card. Your presence there is, in some ways, exploitable.”
The agency is proposing to shift the economics of trading on exchanges and institute a new best-execution rule — a mandate that requires brokers to seek the most favorable terms to carry out client orders. Among other changes, the proposals would force brokers to disclose more about the quality of trading they offer and reroute individual investors’ orders through auctions, putting them up for bids like a collector’s item on eBay to increase competition.
For many small investors, the proposals represent a sign that Gensler’s SEC is taking seriously their concerns that the market is rife with conflicts of interest. “Individual investors feel empowered,” said Lauer, whose group orchestrated a letter-writing campaign to the SEC on the proposals, netting more than 5,000 missives of support for the proposals. “They’re educated and they’re engaged and they’re relentless.”
“We’re essentially taking what is a well-functioning part of the market and introducing new things like ... less transparency and higher costs into the equation,” said Joe Mecane, head of execution services at Citadel Securities, at an industry event. “What I think a lot of us are scratching our heads about is how does that potentially result in a better outcome for investors?”