Thomas Peterffy's Omission
Over the past few weeks, a gent named Thomas Peterffy has been bombarding the airwaves with a television commercial in which he says as follows:
America's wealth comes from the efforts of people striving for success. Take away their incentive with badmouthing success and you take away the wealth that helps us take care of the needy. Yes, in socialism the rich will be poorer. But the poor will also be poorer. People will lose interest in really working hard and creating jobs. I think this is a very slippery slope. It seems like people don't learn from the past. That's why I'm voting Republican and putting this ad on television.
This ad is more than just a simple-minded, intellectually dishonest exercise in sophistry, equating concern about income inequality with advocacy of "socialism." It's also incomplete, in that Peterffy does not disclose how he is able to afford running a shrill, dishonest TV ad.
He is able to do so because of the very party that he is fighting against.
Peterffy is founder and CEO of Interactive Brokers, a publicly traded firm that is in the options trading business. The company's most recent 10-K annual report observes as follows:
The advent of electronic exchanges in the last 21 years has provided us with the opportunity to integrate our software with an increasing number of exchanges and trading venues into one automatically functioning, computerized platform that requires minimal human intervention. Three decades of developing our automated market making platform and our automation of many middle and back office functions has allowed us to become one of the lowest cost providers of broker-dealer services and significantly increase the volume of trades we handle.
In other words, Peterffy made his fortune largely because of Democratic policies favoring electronic trading--especially the policies of the Securities and Exchange Commission under Democratic president Bill Clinton.
Institutional Investor pointed out in a 2005 profile that Peterffy was close to Bill Clinton's deregulation-loving SEC chairman Arthur Levitt, who was an outspoken advocate of electronic trading.
II says that "after Peterffy demonstrated his system to then-SEC chairman Arthur Levitt Jr. in 1999, the agency became convinced that U.S. options exchanges could link electronically to ensure that investors would always receive the best available prices. The SEC soon mandated such a linkage. Peterffy pressured exchanges that resisted moving from floor trading to automated execution.
"Timber Hill [Peterffy's firm] quickly became one of the biggest market makers on the all-electronic International Securities Exchange when it debuted five years ago [in 2000]. "
That's a far cry from the image Peterffy paints of himself as a John Galt-like, regulation-hating capitalist.
He looks like a crony capitalist to me. And a first-class hypocrite to boot.
© 2012 Gary Weiss. All rights reserved.
My latest book is AYN RAND NATION: The Hidden Struggle for America's Soul, published by St. Martin's Press. Click here to order the book from Amazon.com, and here to order it from Barnes & Noble. Follow me on Twitter: @gary_weiss