Document Type


Publication Title

University of Dayton Law Review

Publication Date

Spring 2014


The first stock exchanges involved government. The modern stock exchange is strangely devoid of government presence, at least in terms of the decision to halt trading. Meanwhile, over two-hundred billion dollars trades each day on the New York Stock Exchange, one of thirteen recognized domestic exchanges. A more precise calculation of daily volume needs to include dozens more “alternative trading systems,” even less regulated market centers that have grown in size and capital. Overall, the securities market forges forward each weekday without halt unless outdated or severely technical “breakers” are imposed by the stock exchanges themselves. The federal government – a mighty and primary industry regulator since 1934 – largely watches the frantic pace from the sidelines, relegated to the role of chronicler of each downturn or crash.

Similarly, the private sector observers are distanced. Few know what objective standards govern halts at a stock exchange, much less what news or events directly influence it. The “market” is simultaneously blamed for disproportionate wealth, credited for responding to reliable economic indicators, punished by disaffected customers, and linked to a dearth of reason. It can, at times, choose to simply ignore significant events; at other times, it falls prey to the most inane of rumors. It is, curiously, at once decried as a poor economic indicator and routinely credited as a merciless judge of financial fault. While it holds our collective hopes (both literally and figuratively), the stock exchange simply does not appear to stop in meaningful fashion in times of crisis.

Accordingly, this article examines who and what makes this financial beast stop, and argues that such halts need to be more frequent, better publicized, and more often prompted by government action. The Securities and Exchange Commission need not be an observer to this cause. In the recent past, the Commission has overcome intractable exchanges to spur, among other changes, the demystification of stock pricing (by mandating a switch to decimals), and the end to an exchange’s monopoly on the stock of an individual issuer (by prompting rescission of single listing rules). With bold but simple strokes the world’s most feared securities regulator could impose rationality on a market presently poised for more chaos when chaos erupts.

Simply put, the Leviathan needs occasionally to be forced to sleep, if only to give its combatants time to flee.



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