Author Michael Lewis’ skepticism of all things Wall Street has made him millions in royalties over the years and brought him hundreds of thousands of readers and fans. And yet his recent claim — in his latest book, Flash Boys, and in a now-infamous 60 Minutes interview a couple of months ago — that the U.S. stock market is “rigged” is both very wrong and very right.

The gist of his claim is that the stock markets are rigged in favor of high-speed traders who pay for preferential access to the NYSE and Nasdaq computers that match buyers and sellers. They get quicker trading opportunities because of their fiber optic cable feeds into the servers and because their trading servers are housed, in some cases, in the same room as the exchange’s own computers.

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access