Move over DiCaprio, there's a new HFT wolf on Wall Street

In Searchlight, Michael Lewis inspires talk about the new HFT wolf on Wall Street; plus, Amazon cloud is dirtiest and users say, 'Two phones please.'

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Haven't seen The Wolf of Wall Street yet? CIOs might want to save that wild chronicle of the rise and fall of 1990s financial fraudster Jordan Belfort for a rainy day -- and skip right to the 21st century version of Wall Street shenanigans. Financial journalist Michael Lewis' latest book, Flash Boys: A Wall Street Revolt delves into the rise of high frequency trading (HFT) on Wall Street and traces the efforts of the unlikely band of outsiders to understand and rectify the system. It gives a whole new meaning to the CIO mantra of "need for speed."

Our lead item in this week's Searchlight news roundup points you to an excerpt of Lewis' book. For a quick summary, check out Tuesday's episode of The Daily Show with Jon Stewart, in which Lewis explains HFT in layman's terms. To wit: The 13 U.S. public trading stock exchanges sell traders the rights to situate HFT computers next to the stock exchange computers. The close proximity confers a competitive advantage. High frequency traders see price fluctuations before the rest of the buyers; so if the price has changed, they can capitalize on it before their competitors. It’s a question of milliseconds -- but when a computer is making the buying decision, that translates into, well, more money than a person -- most people -- could spend in a lifetime. Technically, Lewis tells us, this is a case of front running -- which is illegal when a human does it, but not when a computer does it.

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What's the bigger question for our computer-savvy CIO audience? What other crimes are computers committing electronically that would put a person in prison? Let us know in our comments section -- oh, and if you've seen the Martin Scorsese movie, feel free to pen a review. In my opinion Leonardo DiCaprio could do no wrong in this role and is forever vindicated for giving Rose the piece of driftwood.

  • One day following Lewis's book release, the FBI announced an investigation into high frequency trading, though it isn't linking its investigation directly to Flash Boys. Read about Lewis' book and hobbling Wall Street cowboys in NYT Books section.
  • What, me worried about the environment? When Greenpeace graded companies on their energy transparency, renewable energy commitment, energy efficiency and renewable energy deployment and advocacy -- companies like Amazon, Twitter and Oracle found themselves on the blacklist.
  • For some, one cell phone just isn't enough. Those looking to stay focused, keep their private lives private and stay sane -- carry two.
  • Your CIO shouldn't be playing CDO, just as your CDO shouldn't be playing CIO; and neither individual should be working in the other's shadow. Richard Wang, who runs MIT’s CDO research and information quality programs, says CIOs have too much on their plates to focus on developing new information-based innovations.
  • Soon losing your car mirror to a drive-by accident will be a headache of the past. City resident parkers, rejoice! Tesla Motors and other automakers introduce us to the future.

Let us know what you think about the story; email Emily McLaughlin, associate site editor.

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This was first published in April 2014

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