Wall Street – Stock Market Rigged? ‘60 Minutes’ Interview plus ‘Flash Boys’ author Michael Lewis Speaks on CNBC

After a CBS ’60 Minutes’ story this past Sunday, and a new book from author Michael Lewis titled ‘Flash Boys: A Wall Street Revolt,’ many are asking whether Wall Street and the U.S. stock market is rigged?

The debate centers around the premise that High-Speed Traders (HST) have been making millions by taking advantage of a speed loophole in the current IT structure of the stock trading system in the United States.



In a 60 Minutes story this week, CBS interviewed Brad Katsuyama who discovered the loophole while working at the Royal Bank of Canada (RBC). As shown in the report, the HST companies spend hundreds of millions of dollars to lay high-speed fiber optic cable which gave them a fraction of a millisecond advantage in stock trading.

While it may not sound like much, this advantage allows the HSTs to see another broker’s stock order before it executes, and then allow them to place the order first, raising the stock price, and then sell the stock, ultimately to the broker, at a higher price. All happening within fractions of a second creating micro profits thousands of times per hour – leading to millions in profits.

Lewis wrote a book about Katsuyama and his team which discovered the loophole, made it public, and found a way to close it. The team has since stated their own trading market promising fair and transparent trading.

Today both Lewis and Katsuyama were guests on CNBC discussing the issue with other analysts.

Additionally, a New York Times article, written by Lewis, appeared online this week which goes into more depth on the issue and is based on Lewis’ book. The article is titled “The Wolf Hunters of Wall Street” An Adaptation From ‘Flash Boys: A Wall Street Revolt’.

The complete NY Times article can be found online at: http://www.nytimes.com/2014/04/06/magazine/flash-boys-michael-lewis.html?ref=magazine&_r=0.