MONTREAL Getco LLC, a big market maker and high-frequency trader, has hired a key U.S. Securities and Exchange Commission associate in charge of crafting rules for the equity and option markets.
Elizabeth King will join Getco as the SEC steps up scrutiny of the fragmented, mostly electronic marketplace and considers new rules to ensure fair access to public markets.
King was associate director of the SEC's trading and markets division, which is responsible for supervising exchanges, brokers and credit rating agencies.
The division is also responsible for crafting controversial proposals to rein in short sellers, or investors who profit on a stock's decline, as well as proposals to ban the so-called flash orders that caused a stir last year and helped spark a wide-ranging review of the U.S. market structure.
King will join Getco's legal unit and will probably be instrumental in helping the Chicago-based company navigate regulatory issues with the SEC.
Getco and other high-frequency traders were shoved further into the spotlight after the surprise flash crash in early May, where some were blamed for exacerbating the drop by pulling out of the market. Getco has said it continued to trade that day.
Regulators are still trying to figure out what caused the Dow Jones industrial average to fall some 700 points in minutes before sharply recovering on May 6.
A spokeswoman for Getco said: "We're pleased (King) is joining our legal and regulatory compliance team." The SEC was not immediately available to comment.
King is a fixture at options-related conferences and gatherings around the United States. With Getco, it is unclear whether she will be based in Washington or Chicago.
Getco has emerged as a global leader in algorithmic trading in many asset classes and this year became an official market maker for NYSE-listed stocks.
The company's chief executive officer, Stephen Schuler, participated in an SEC roundtable discussion on trading and markets this month.
(Reporting by Rachelle Younglai and Jonathan Spicer; Editing by Lisa Von Ahn)