Leon Cooperman says SEC needs to investigate computer trading for causing 'Wild West' with markets

Omega Advisors founder Leon Cooperman blamed officials at the Securities and Exchange Commission for failing to address the impact computerize trading has had on the broader market and how it exacerbates volatility during market swings.

“I think your next guest ought to be somebody from the SEC to explain why they have sat back calmly, quietly, without saying anything and allowing these algorithmic, trend-following models to wreak havoc with what has, up to now, been the best capital market in the world,” Cooperman told CNBC’s Scott Wapner.

“In the mid-1930s, they instituted the Uptick Rule to deal with the abuses of 1929. It worked effectively for 70-odd years, they took it out in 2008 for some unexplainable reason,” he added. “And they created a Wild, Wild West environment in the stock market.”

The billionaire’s comments came after the Dow Jones Industrial Average suffered an almost 800-point drop on Tuesday and was down nearly 700 points on Thursday. The major stock indexes have plummeted in recent sessions as fears over a slowdown in economic growth and the U.S.-China trade war grip market participants. Tuesday was the index’s worst performance since Oct. 10.

“Bear markets don’t materialize out of immaculate conception. They come about from certain fundamental reasons the stock market is seeing,” Cooperman said. “The no. 1 cause of a bear market is the stock market smelling an oncoming recession. I won’t cite all the economic data, but there’s just no signs of recession.”

The Uptick Rule was a law by the SEC that mandated that every short sale be submitted

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