A group of nine financial firms, including an admitted felon and two high-frequency trading powerhouses, announced this week that they plan to open a national stock exchange to compete head on with the New York Stock Exchange and the Nasdaq. We’ll detail those players shortly but first some necessary background to explain why this plan must never come to fruition.

Yes, our two major stock exchanges are a viper’s nest of conflicts of interest and in desperate need of reform, but this motley crew can only make matters worse.

Following the 1929 stock market crash, the U.S. Senate conducted three years of hearings into the brazen self-dealing and rigged trading by the major Wall Street firms that resulted in an epic crash that eventually erased 90 percent of the stock market’s value, led to the collapse of thousands of banks, and brought on the Great Depression. The hearings generated front page headlines for years. The public anger was so great that Congress was able to pass two sweeping pieces of legislation: the Securities Act of 1933, which mandated that investors receive significant information on securities being offered for sale to the public through a Federal registration process; and the Securities Exchange Act of 1934 which created the Securities and Exchange Commission and empowered it to register, regulate and oversee brokerage firms, clearing agencies, and, importantly, stock exchanges.

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