President Obama Nominates Mary Jo White for Chair of the Securities and Exchange Commission
Since bestselling author Michael Lewis appeared on 60 Minutes
on March 30 to promote his new book, Flash Boys
, and explained how the U.S. stock market is rigged; and Brad Katsuyama, the head of IEX, an electronic trading platform who plays a central role in the Lewis book, did the same on CNBC a few days later, the debate has gone viral.
But Lewis and Katsuyama were not the first to blow the whistle on rigged U.S. stock markets. Sal Arnuk and Joseph Saluzzi, Wall Street insiders and co-founders of Themis Trading LLC literally wrote the book on Broken Markets
in 2012 and have been exposing details of the rigging on their blog
Wall Street Journal
reporter, Scott Patterson, mapped out the exotic and corrupt order types permitted by the stock exchanges to fleece the little guy in his 2012 book, Dark Pools
, which follows the trading career of Haim Bodek, who has set up his own web site
to blow the whistle on just how badly the stock market is rigged.
Following all the media hoopla, the FBI has recently announced that it has opened an investigation into the allegations. But under the Securities Exchange Act of 1934, the FBI is not in charge of rigged stock exchanges - the Securities and Exchange Commission is. But according to insiders, the SEC has stood down in much the same fashion that it ignored warnings about Bernard Madoff from whistleblower Harry Markopolos for years. The explanation for the SEC's inaction, many traders feel, is that the SEC itself is rigged against Main Street in favor of big Wall Street firms. That view has found support among the SEC's own insiders.