By Laurie Cherenfant

The auditorium at the New York Historical Society was filled with businessmen and women as State Attorney General Eric Schneiderman criticized some of the practices of high frequency trading and urged legislators to design laws to curb the excesses.

“No one is going to invest if they think the markets are rigged,” Schneiderman said in a speech to the Bloomberg Markets 50 Summit. “This hurts the market as a whole.” The Martin Act, the legislation that fights financial fraud, is not clear and somewhat ambiguous, Schneiderman added.

Schneiderman’s criticism was sparked by his investigation in July of the data provider Thomson Reuters’s early disclosure of financial data to elite traders, in some cases two seconds earlier than the general public.

“Two seconds is a lifetime in the insider trading market, “Schneiderman said, branding the practice “Insider Trading 2.0.”

An example of how fast technology can take over the financial market was seen in late April when a fake tweet about an explosion at the White House was posted on Twitter. Within three minutes, the Dow Jones Industrial Average temporarily dropped 143.5 points.

“This is a bad time to have frightening new technology,” Schneiderman said.

His concerns were echoed in a report issued the same day by Manhattan DA Cyrus Vance who also said that laws against electronic crime were “outmoded.” “The nternet has become our 21st Century crime scene,” said Vance.