According to Michael Lewis, people got his latest book all wrong.
Flash Boys, which explains how high-frequency trading is used to rig U.S. markets, caused an uproar on Wall Street last year among financiers, regulators, and the general public.
But in the April issue of Vanity Fair, Lewis said that he doesn’t “feel that strongly about high-frequency trading,” compared to the overwhelmingly negative response. Instead, it should be the big banks the public is angry with, he said.
From the article:
The public response surprised me: the attention became focused almost entirely on high-frequency trading, when — as I thought I had made clear — the problem wasn’t just high-frequency trading. The problem was the entire system…
The big banks and the exchanges have a clear responsibility to protect investors — to handle investor stock-market orders in the best possible way, and to create a fair marketplace. Instead, they have been paid to compromise investors’ interests while pretending to guard those interests. I was surprised more people weren’t angry with them.
Lewis also said the concentration on high-frequency trading has detracted from his main message, which he meant to focus on Brad Katsuyama, his team, and their stock exchange IEX .
“That some minority on Wall Street is getting rich by exploiting a screwed-up financial system is no longer news,” Lewis wrote. “What comes as news is that there is now a minority on Wall Street trying to fix the system.”