Gregg Berman is leaving the U.S. Securities and Exchange Commission, where he led efforts to get a grip on fragmented markets and high-frequency trading.
A Princeton-trained physicist, Berman joined the SEC in 2009 and was later tapped to spearhead the agency’s investigation into what caused the May 2010 flash crash that erased about $862 billion in market value before share prices recovered. The SEC announced Wednesday that Berman plans to leave the agency later this month.
With his departure, high-frequency traders lose a friendly voice at the agency. Berman has repeatedly countered broad accusations that they harm markets. He has said critics and industry officials have villainized high-frequency trading without even defining what’s wrong with the $24.7 trillion U.S. stock market.
Berman, an associate director in the SEC’s trading and markets division, hasn’t decided where he’ll work next, SEC spokesman John Nester said. Before joining the SEC in 2009, he spent nearly ten years at New York-based RiskMetrics Group Inc. and earlier worked for hedge-fund adviser Mint Investment Management.
Berman, 48, became known for urging the SEC and other regulators to incorporate more data analysis into regulation. His efforts helped lead the agency to acquire the technology to view about 1 billion trading records per day from 13 U.S. equity exchanges. The tool, known as Midas, gives the SEC access to data similar to that of high-speed trading firms.
“Gregg has played a key role in enhancing the way we deliver market information to the public and our regulatory partners,” Stephen Luparello, head of the SEC’s trading and markets division, said in a statement. “His judgment, analysis and creativity have been invaluable and I am grateful to him for his contributions to the division and the agency.”
Berman also has played a leading role in developing a pilot program aimed at boosting the liquidity of smaller stocks. The program, the rules for which are scheduled to be finalized by May 6, would widen the spread that brokers earn when buying and selling shares in small stocks, making it potentially more profitable to engage in those markets.