Author Michael Lewis’s argument that U.S. stock trading is rigged reflects a misunderstanding of how the market operates and its history, said Bill O’Brien, the president of exchange operator Bats Global Markets Inc.
The software error that derailed the initial public offering of Bats Global Markets Inc., where 11 percent of all U.S. stock trading occurs, rattled investors concerned about the growing complexity of financial markets.
The decision by Bats Global Markets Inc., the third-largest U.S. equity exchange operator, to cancel its initial public offering emboldened brokerage and fund executives who say the way stocks trade in America doesn’t work.
Bats Global Markets, the stock trading platform that grew from two customers in 2006 to become the third-largest U.S. exchange operator, will expand to new products and consider an initial public offering, said Joe Ratterman , chief executive officer and president.
Investors, traders and regulators underappreciate the harm caused by the fragmentation of trading across a dozen public markets with different rules and conventions, said Dave Cummings of Tradebot Systems Inc.
The potential for “uncoordinated and chaotic” trading after bad code corrupted its computers spurred Bats Global Markets Inc., the third-biggest U.S. stock exchange operator, to scuttle its initial public offering, according to the company’s chief executive officer.
Bats Global Markets Inc., whose board is preparing to review last week’s failed initial public offering, should weather any retreat in stock trading as the IPO debacle recedes, said Edward Wedbush, whose firm owns a stake in the nation’s third-largest operator of equities venues.