The United States Securities and
Exchange Commission Chair, Mary Jo White, on Tuesday responded directly to
allegations in Michael Lewis’ new book about high-frequency trading markets.
“The markets are not rigged,” she
told a US House of Representatives panel. “The US markets are the strongest and
most reliable in the world.”
Reuters reported
that White’s comments come nearly a month after Lewis’ “Flash Boys: A Wall
Street Revolt,” was published. The book has re-ignited a fierce debate over the
role of high-speed trading, and whether it may leave some investors at an
unfair disadvantage.
Lewis alleges that high-speed
traders are engaged in a form of front-running, in which the firms are able to
quickly identify an investor’s desire to buy stock, rush to buy it first and
then sell it back at a higher price.
Since the book was released, the
FBI, the US Attorney General, New York state prosecutors and the SEC have all
confirmed they are investigating the practices of high-speed firms.
White on Tuesday tried to soothe
some concerns about whether firms are wrongfully trading ahead of others.
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