Michael Lewis Tackles the Rigging of the Stock Market

Michael Lewis, author of Moneyball, The Big Short, and other best-selling books has come out with a new book this week called Flash Boys, which looks at high-frequency trading and how the stock market is rigged to make billions for a group of insiders. 60 Minutes talked to Lewis about his book this weekend.

Steve Kroft: What’s the headline here?

Michael Lewis: Stock market’s rigged. The United States stock market, the most iconic market in global capitalism is rigged.

Steve Kroft: By whom?

Michael Lewis: By a combination of these stock exchanges, the big Wall Street banks and high-frequency traders.

Steve Kroft: Who are the victims?

Michael Lewis: Everybody who has an investment in the stock market.

In a story, there are villains and heroes, and one of the heroes of this story is a Canadian man named Brad Katsuyama who worked for the Royal Bank of Canada and whose team worked basically to unrig the market and make trading fair for everyone. The New York Times Magazine has an excerpt of Lewis’s book looking at Katsuyama’s story as he figured out what was wrong with high-frequency trading:

“It’s 2009,” Katsuyama says. “This had been happening to me for almost two years. There’s no way I’m the first guy to have figured this out. So what happened to everyone else?” The question seemed to answer itself: Anyone who understood the problem was making money off it.

But at Bloomberg View, our pal Matt Levine says the story is much more complicated:

I don’t know, I feel a little sorry for the HFTs [High Frequency Traders]. They check a lot of the right boxes to be the heroes of their own Michael Lewis stories. It’s sad for them that they instead turned out to be the villains of someone else’s.

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