FBI to probe high-frequency stock trading
Sources tell CBS News the FBI is investigating so-called high-frequency traders to see if they are unfairly using a speed advantage to essentially game investment markets.
As a CBS News "60 Minutes" report detailed Sunday, some traders may be using information that they receive just a fraction of a second ahead of everyone else, to decide what to buy and sell -- and when.
It's not clear that this kind of trading is illegal, but sources say the FBI will look into possible violations including wire fraud and insider trading. A law enforcement official says the investigation actually began last year.
Because it is a highly technical and complex probe it will likely take months.
As Steve Kroft reported Sunday on "60 Minutes", this month marks the fifth anniversary of the current bull market on Wall Street, making it one of the longest and strongest in history. Yet U.S. stock ownership is at a record low and less than half of Americans trust banks and financial services. And in the last two weeks, the New York attorney general and the Commodities Futures Trading Commission in Washington have both launched investigations into high-frequency computerized stock trading that now controls more than half the market.
The probes were announced just ahead of a much anticipated book on the subject by best-selling author Michael Lewis called "Flash Boys." In it, Lewis argues that the stock market is now rigged to benefit a group of insiders that have made tens of billions of dollars exploiting computerized trading.