James Moore: Wall Street lobbyists can celebrate as judge passes the buck in Barclays 'Flash Boy' case

How much responsibility do you have if you stage a football tournament and invite a team that you know plays wearing hob-nailed boots with the express intention of winning by breaking the legs of the opposition?

An argument like that is raging through the American courts, as investors attempt to call the tournament organisers — in this case the operators of stock exchanges including Barclays — to account for allegedly having their legs broken by high-frequency traders (HFTs), the people made infamous by Michael Lewis’s best-selling “Flash Boys”.

The investors claim the game was rigged against them before they even took to the pitch. They want compensation.

Unfortunately for them, judge Jesse Furman has decided the tournament organisers didn’t break any laws.

His legal opinion was that as they were self-regulatory organisations they had “absolute immunity” from the key claims of the investors, even if they did things like offering proprietary data feeds and other sweeties to get the flash boys to play (as the investors claimed).

The judge also argued that the plaintiffs didn’t show that they relied on misrepresentations allegedly made by Barclays about the safety of its “dark-pool” exchange before taking to the pitch.

Critics of HFTs say they provide no useful purpose.

Their defenders can only argue that they “provide liquidity” to the markets and therefore facilitate trading, which is a circular argument at best.

The judge conceded that may be true and there might be a need for regulatory and political action, but he doesn’t think it’s one of the courts.

The problem with what the judge has said is that Wall Street’s lobbyists are past masters at frustrating attempts to rein it in.