Wednesday, April 2, 2014

Heated Debates Over Rigged Markets Disclosure from Michael Lewis (VIDEO)


Source Link: BATS in the Belfry: Charges Fly on CNBC Over Rigged Markets

By Pam Martens: April 2, 2014
Traders on Floor of NYSE Stop Trading to Listen to High Frequency Trading Debate on CNBC Following Michael Lewis' Charges on 60 Minutes That the Market Is Rigged

During this past Sunday evening’s 60 Minutes segment on how high frequency traders in combination with stock exchanges selling high-speed access have rigged the stock market, one stock exchange was called out by name: BATS. The program explored charges made in bestselling author, Michael Lewis’ new book, “Flash Boys.”

Yesterday, the President of BATS Global Markets, Inc., William (Bill) O’Brien appeared on CNBC to debate Michael Lewis and the young entrepreneur featured in his book, Brad Katsuyama, who has opened the IEX trading platform that promises to level the playing field by putting in speed bumps that slow down high frequency traders.

O’Brien came out of the gate hurling charges at Lewis and Katsuyama for making false accusations, spreading fear, and scaring investors. O’Brien repeatedly interrupted when Lewis and Katsuyama attempted to speak, jabbed his fingers in the air at Katsuyama and appeared generally ignorant of the gravity of having your stock exchange called out on a CBS news program that reaches upwards of 14.3 million viewers.

After O’Brien badgered Katsuyama to admit that he said the markets were rigged, Katsuyama said: “I believe the markets are rigged and I also think that you’re a part of the rigging. If you want to do this, let’s do this.” Lewis said he thought O’Brien’s conduct was “outrageous.” O’Brien proceeded to effectively call Lewis a liar in saying that he had visited the BATS exchange, saying “Give me a date.” Lewis gave him the date of February 5, 2013 and O’Brien continued to say it didn’t happen. Lewis, in exasperation, said “there’s actually no point in talking to someone who’s just throwing dust in the air.”

The debate was so heated that CNBC panned to a shot of traders who had stopped trading on the floor of the New York Stock Exchange in order to watch the debate. Unfortunately, those traders were wearing Barclays’ jackets – not exactly a testament to fair markets. On February 17 of this year, the U.K.’s Serious Fraud Office released the following statement: “Criminal proceedings by the Serious Fraud Office have commenced today against three former employees at Barclays Bank Plc, Peter Charles Johnson, Jonathan James Mathew and Stylianos Contogoulas, in connection with the manipulation of LIBOR.  It is alleged they conspired to defraud between 1 June 2005 and 31 August 2007.”

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