Michael Lewis is out with a new book today.
Flash Boys: A Wall Street Revolt is about how Wall Street banks are using high frequency trades and various algorithms to make trades milliseconds ahead of the rest of the market. Sergey Aleynikov who was profiled by Lewis in Vanity Fair last fall is featured in the book, along with Brad Katsuyama, the founder of IEX, a new exchange with an interesting speed bump (60 km of cable) aimed at thwarting high frequency trading. Interestingly, the book seems to have been kept a secret until a day or two before its release.
More at International Busines Times:
The controversial practice, in which firms strategically locate servers and use sophisticated computer algorithms to accelerate transactions by mere microseconds — and thus reap huge profits — is the subject of a probe by New York Attorney General Eric Schneiderman. Last week, he announced an inquiry into how such traders have gained an unfair advantage in the timing of their trades by paying fees to exchanges such as the New York Stock Exchange and Nasdaq to locate their servers in the exchanges’ own data centers. “I have been focused on cracking down on fundamentally unfair – and potentially illegal – situations that give elite groups of traders early access to market-moving information at the expense of the rest of the market,” Schneiderman said in a speech. Several regulators, including the Securities and Exchange Commission and the Commodity Futures Trading Commission, are exploring new regulations of high-frequency trading to limit such abuses.
On 60 Minutes, Lewis say, Flash Boys is, “The story of trying to restore trust to to the financial markets.”