Michael Lewis should have known when he entered the high-stakes battle over high-frequency trading it was likely to be a bare knuckles fight where all the participants didn’t play by the “rules.”
Michael Lewis outs big bank broker he says is smearing his name
In a post on his Facebook page, Michael Lewis notes a large bank may be smearing his name, implying that he is “underhanded and corrupt” because he could have an undisclosed stake in IEX, the exchange profiled in his new book Flash Boys.
Flash Boys takes direct aim at the multi-billion dollar HFT industry, telling the story of three Wall Street players who figured out how it worked and left their jobs to build an exchange “based on trust” that didn’t provide special benefits to HFT.
“A guy who works for a big bank, BNP Paribas SA (ADR) (OTCMKTS:BNPQY) (EPA:BNP), just typed an email to the bank’s clients saying that I have an undisclosed stake in IEX, the business at the heart of Flash Boys, and thus, by implication, am underhanded and corrupt,” Michael Lewis wrote, taking the unusual step of identifying the bank by name. BNP Paribas has been said to be involved in “dark pool” development where stocks trade in opaque private venues. Such venues compete with IEX.
Lewis claims no stake in IEX
Lewis then set the record straight. “But I have no such stake (in IEX),” he wrote, before asking perhaps a question that has an easy answer. “Who starts a rumor on Wall Street? Why does a big bank repeat it?” Michael Lewis just entered a competitive blood sport where the stakes are in the billions. If he thinks he will be able to drum up popular support to take apart the powerful stock exchange structure without taking punches below the belt, he is likely sorely mistaken.
“Does his mother know what he does for a living?”
Then Michael Lewis concludes the post with a potentially below the belt punch of his own, releasing the individual name of the broker on PNB’s Forex trading desk in New York. “Does his mother know what he does for a living?” Lewis asked.
When contacted on his trade desk, the broker at PNB did not return calls by press time.