Author: No "real" change after revealing Wall Street book
Nearly a year after best-selling author Michael Lewis released his book "Flash Boys," he said there "hasn't been real structural change" to the financial system he says is rigged against average investors.
"The bad incentives that are the heart of the problem, which in fact were the heart of the financial crisis, like poorly incentivized financial intermediaries, are still there," Lewis said Monday on "CBS This Morning."
"Flash Boys" chronicles a group of financiers' journey to fix the system they deem imbalanced, one that benefits a group of high-frequency trade investors. Even still, his book serves as more than just an exposé of Wall Street.
"If I had just been told that the stock market's got this rigging in it and ordinary investors are disadvantaged in their relation to these high frequency traders, I wouldn't have been that interested in the story," Lewis said. "What interested me was that some people inside the market had figured what was going on and instead of trying to make money from it, were trying to fix the problem."
Lewis described two ways in which the markets can be fixed.
"One is, regulators come in and fix it, but regulators help create the system," he said.
The other involves a new exchange called IEX that its creators believe will alleviate some of the problems.
"They're going to become a public exchange in the fall, they've raised a whole bunch of money, investors are behind them," Lewis said. "I think that's the hopeful path, is the market fixing the problem."
Although Lewis says his book created a lot of "noise" within the SEC, widespread reform has yet to be implemented.
"It's hard to know whether there are rules they can create that can't be gamed, especially giving the existing political system and the poisonous relationship between the regulators and the political system," he said.
His efforts were not without criticism. In an April interview with CBS MoneyWatch, Vanguard founder Jack Bogle argued that the claims Lewis makes are "too extreme." They also reported The Modern Markets Initiative, which advocates for high-speed firms, continues to argue that critics overstate the risk and underestimate the benefits of the technology.
"Everybody who said that actually had a stake in the existing system," he said.
Now, his revealing book is slated to be made into a movie, adapted by Aaron Sorkin.
To hear how Lewis handles his money, watch the video above.