Michael Lewis: US stock market is rigged

Michael Lewis, author and financial journalist, said Sunday that the U.S. stock market is rigged and that high-frequency trading is being misused by traders. Making an appearance on CBS' 60 Minutes, Lewis said that Wall Street firms use high-frequency trading technology, which uses automation and advanced computer networks, giving them an unfair advantage over regular investors. "The United States stock market, the most iconic market in global capitalism, is rigged," Lewis told Steve Kroft on the CBS News program. "If it wasn't complicated, it wouldn't be allowed to happen," he went on. "The complexity disguises what is happening. If it's so complicated you can't understand it, then you can't question it." Lewis' comments come a day ahead of the launch of his book Flash Boys, which follows the story of a former Royal Bank of Canada trader, who created a system that helped nullify the advantage high-frequency traders have. The system simply ensured that all stock orders reached the exchanges at the same time. According to Lewis, high-frequency trading gives traders an opportunity to spot orders and then take positions based on those orders to benefit themselves. "The insiders are able to move faster than you and play it against orders in ways you don't understand," Lewis said. High-frequency trading accounts for nearly half of the shares traded in the U.S. and while it hasn't been the center of the scrutiny faced by Wall Street firms after the financial crisis, New York Attorney General Eric Schneiderman publicly criticized certain advantages these traders enjoy. Schneiderman asked stock markets to curb high-frquency trading and disallow firms to put their servers within the exchanges' data centers. Lewis has written about subprime mortgage securities and his experiences in the financial world in Liar's Poker and The Big Short, in addition to writing Moneyball, a book about the Oakland A's that was made into a movie starring Brad Pitt and Jonah Hill.