Yes, that's a good point - and both my criticism and your rebuttal could be applied to any number of professional traders, not just HFT systems. I was mainly f

Yes, that's a good point - and both my criticism and your rebuttal could be applied to any number of professional traders, not just HFT systems. I was mainly focused on this claim from the New York Times article: "A loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee." If true, this means that the HFT operators are not necessarily taking on the normal level of price risk, and their incentives aren't necessarily aligned with efficiency as they would be in a neutral market. And the point I should have made is that most of our market regulations are not about efficiency, but about more specific ideas of fairness or transparency. For example, insider trading does not introduce inefficiency into a market, but it's regulated nevertheless.