Hillary Clinton used her big economic policy rollout last week to, in part, call out high-frequency trading, which she argues could pose serious risks to the economy. But that hasn't stopped her from accepting money from the industry or doing so in the future.
During Monday's speech, the former secretary of State mentioned the practice twice, warning about threats "from institutions in the so-called 'shadow-banking' system—including hedge funds, high-frequency traders, nonbank finance companies—so many new kinds of entities which receive little oversight at all."
Clinton also mentioned high-frequency trading as a matter of market safety.
"Over the course of this campaign, I will offer plans to rein in excessive risks on Wall Street and ensure that stock markets work for everyday investors, not just high-frequency traders and those with the best—or fastest—connections," Clinton said.
High-frequency trading generally refers to the use of trading with computers by way of complex algorithms and has come under scrutiny since the 2010 Flash Crash, where markets experienced high volatility for a short amount of time. A 2014 Commodity Futures Trading Commission report said while high-frequency trading did not cause the Flash Crash, it did contribute to it.
But despite Clinton's talk about the practice's problems, Clinton will have a fundraiser Tuesday at the Chicago home of Raj Fernando, who founded Chopper Trading, a high-frequency trading firm that was purchased this year by the DRW Trading Group.
David Walsh, who works with DRW, told National Journal that Fernando is not affiliated with the group. Repeated requests for response from Fernando through his assistant were not returned.
Fernando is a longtime Clinton donor. In 2014, he donated $5,000 to what was then known as Ready for Hillary, established to prepare for a Clinton candidacy, and he also donated to Clinton's 2008 run for president. A search of the Federal Election Commission's website showed that Clinton received 18 donations from people affiliated with Chopper Trading dating back to 2005.
In addition, a search of donors to the Clinton Foundation found that Fernando gave between $500,001 to $1 million, and the website indicates he gave as recently as last year.
Ironically, some of the politicians Fernando has donated to have come out against high-frequency trading. In 2007, he donated $2,300 to Rep. Chris Van Hollen, who now supports a fee on financial transactions, saying it would curb high-frequency trading. Fernando also gave $4,000 in 2010 to the reelection campaign for Clinton's now primary-opponent, former Maryland Gov. Martin O'Malley, who also supports a financial-transaction tax to limit high-frequency trading.
For their part, since high-frequency trading hit the headlines since the release of Flash Boys by Michael Lewis last year, high-frequency traders have been trying to get their message out. Four high-frequency trading firms—including Tower Research Capital, Hudson River Trading, Quantlab Financial, and Global Trading Systems—helped start Modern Markets Initiative as an advocacy organization for organizations that use high-frequency trading.
Bill Harts, CEO of Modern Markets Initiative, said the goal of his organization is to communicate how high-frequency trading techniques saves everyone money.
"That includes every candidate," he said. "We would happy to meet with any of the campaigns to explain."
None of this is to say that Clinton will do the bidding of high-frequency trading. But Clinton's decision to host a fundraiser shows Clinton is willing to call out high-frequency traders but will gladly take one trader's cash with the speed it would take to place an order with their algorithms.
Correction: An earlier version of this story misstated Fernando's role for Obama's 2008 campaign. He was a donor to the Obama Victory Fund.
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Eric Garcia is a staff correspondent for National Journal. He previously was a transparency reporter for MarketWatch, where he reported on financial regulation issues. His work has also appeared in the Southern Political Report, Salon, the American Prospect and the New Republic. He is a graduate of the University of North Carolina at Chapel Hill, and covered politics for its campus paper, the Daily Tar Heel.