Lewis (Moneyball) has a knack for illuminating complicated subjects. In this effort, he takes on high-frequency trading (HFT) in the U.S. equities market and that, post-2008, supposed reforms on Wall Street failed to end the worst pre-2008 excesses. Our story's moral compass is provided by financial services executive Brad Katsuyama, who discovered that the stock market is essentially rigged by firms that use their superior speed (courtesy of advanced algorithms and supercomputers) to skim a little money off nearly every trade. Since many people's retirement plans are tied to personal or mutual fund investments, this is an issue with currency for a wide audience. Katsuyama has helped form an alternative trading system in hopes of leveling the playing field. Narrator Dylan Baker, blessed with a strong story to tell, ably navigates the slippery minefield of high finance and low shenanigans. VERDICT Highly recommended. Kelly Sinclair, Temple P.L., TX (c) Copyright 2014. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.

FOR BRAD KATSUYAMA, then a young equities trader at Royal Bank of Canada, a life-changing revelation about the stock market began in June 2007 with a mystery: Why, when he tried to buy stocks at the offered prices on his computer screen, did the offers instantly vanish and the prices pop higher? Katsuyama's struggle to first understand why he couldn't execute the trades showing up on his screen, and then to combat the problem by starting his own stock exchange, is the spine of "Flash Boys: A Wall Street Revolt," Michael Lewis's latest excursion onto the trading floors of Wall Street, a venue he portrayed so memorably in his now-classic "Liar's Poker." When it comes to narrative skill, a reporter's curiosity and an uncanny instinct for the pulse of the Zeitgeist, Lewis is a triple threat, as he's demonstrated in bestselling books like "The Big Short" and "Moneyball." But those formidable talents are only intermittently on display in this ultimately unsatisfying probe of high-frequency traders, who may (or may not) be ripping off investors and destabilizing the global financial system. In Katsuyama, Lewis has found a good guide into the esoteric and highly technical world of high-frequency trading. A mild-mannered Canadian Everyman with a capacity for moral judgment all too rare on Wall Street, Katsuyama seemed as befuddled as the rest of us by the explosion of the superfast, computer-driven trading that now accounts for an estimated 50 percent of all transactions in the stock market. He teams up with Ronan Ryan, an awkward young Irish immigrant with a knack for high-speed telecommunications technology, who joins RBC as head of high-frequency trading strategies, even though he has no idea what he's supposed to do. Thanks to their combined expertise, the answer to the mystery of the vanishing sell offers soon becomes clear: High-frequency traders are merely "pinging" the market with bids to tease out genuine buy orders. Then, at blazing speed, they cancel the offers, buy the shares, drive up the price by a few cents and resell them to a real buyer. This seems an amalgam of insider trading and front-running, both illegal in other contexts but, evidently, perfectly lawful here. High-frequency traders have plenty of accomplices, as Katsuyama and Ryan discovered. Foremost among them seem to be the exchanges - the New York Stock Exchange, Nasdaq and BATS, to name some - which are happy to sell their order flow to high-frequency traders and thus have a financial stake in perpetuating their practices. So, too, do the big banks that run so-called dark pools, matching buyer and seller, and that sell their trading information. Armed with knowledge of large buy and sell orders, high-frequency traders dart in ahead of the trades, capturing a tiny spread between bid and ask prices that may last for a millisecond or two. Lewis singles out Goldman Sachs as among the most egregious offenders. Rich Gates, who ran a mutual fund called TFS Capital, was "a bit surprised that Goldman, and only Goldman, seemed to be running a pool that allowed someone else to front-run his orders to the public stock exchanges." He was "shocked" that "no one seemed much to care that 35,000 small investors could be so exposed to predation inside Wall Street's most prominent bank." Among those who seemed unconcerned were reporters at The Wall Street Journal, to whom Gates took his claims, and officials at the Securities and Exchange Commission who turned a deaf ear. Why would this be? One of the frustrating aspects of Lewis's reporting is that readers never hear anyone else's side to a story. No one from Goldman, The Journal, the New York or other stock exchanges, or the S.E.C. offers any explanation, and it isn't clear whether Lewis gave them the opportunity. Taking the book's assertions at face value, how big a threat is high-frequency trading? Something certainly seems rotten here. Lewis relegates to a footnote the startling fact that Virtu Financial, one of the largest high-frequency trading firms, boasts that in five and a half years, it had only one day when it failed to make money, and that was the result of "human error." So there can't be any risk. But the average investor probably wouldn't even notice. Most don't care about a penny or two here and there, although in the aggregate those pennies can add up to big numbers. Defenders of high-frequency trading point out that since its advent soon after the market was computerized in 2000, the spread between bid and ask prices has narrowed, the cost of trading has dropped and investors have saved billions. The case for high-frequency trading is that it provides the liquidity that makes a more efficient, lower-cost, computer-driven market possible. Lewis clearly doesn't buy this argument, calling high-frequency trading "less a market enabler than a weird sort of market burden." Technology should have reduced the cost of intermediation. "Instead this new beast rose up in the middle of the market and the tax increased - by billions of dollars," Lewis writes. "Or had it?" He says he can't answer that, because "the new intermediaries were too good at keeping their profits secret." (IBISWorld, a market research firm that produces reports on high-frequency trading, estimates that it's a $29 billion industry.) But perhaps there's something far more dangerous here than mere intermediation. On May 6, 2010, the Dow Jones industrial average plunged 600 points, and then recovered, in mere minutes, in what is now known as "the flash crash." Despite an S.E.C. investigation and ensuing report, the causes of that confidence-shaking incident remain obscure. Were high-frequency traders and their Wall Street allies to blame? That's a mystery worthy of a book, but Lewis mentions it only in passing. Katsuyama and his band concluded that high-frequency traders, working hand in glove with the exchanges and big banks, were ripping off investors to the tune of billions of dollars. When, like Mickey Rooney and Judy Garland setting out to stage a backyard musical, they decided to quit their jobs at RBC and create their own exchange, their idea was to create a market free from conflicts of interest and openly at odds with the high-frequency traders. In Lewis's telling, their motives were largely idealistic and altruistic. "They loved the idea of a stock exchange that protected investors from Wall Street's predators." But presumably there was also a profit to be made once the high-volume traders - Vanguard, Fidelity and other big fund companies - gravitated to their new exchange and away from their corrupt rivals. That proved harder than expected. Katsuyama shocked a group of investors when he told them how the banks were colluding against them. "Which bank is the worst?" one asked. "I can't tell you," Katsuyama replied. "Do you know how frustrating it is to sit here and hear this and not know who that broker is?" another asked. "What we want to do is highlight the good brokers," Katsuyama replied, in classic P.R.-speak. Evidently idealism has its limits. But surely Goldman Sachs must be among the villains? Lewis repeatedly castigates Goldman for its alleged complicity in the financial crisis, and the firm played the role of the heavy in the saga of Sergey Aleynikov, about whom Lewis wrote at length in Vanity Fair and whom he rather awkwardly inserts into his narrative here. After Aleynikov left Goldman, where he was well paid but little more than a cog in the bank's own high-frequency trading operation, he was arrested and charged with stealing Goldman's computer code and covering his tracks. "The only Goldman Sachs employee arrested by the F.B.I. in the aftermath of a financial crisis Goldman had done so much to fuel was the employee Goldman asked the F.B.I. to arrest," Lewis dryly observes. so it comes as an unexpected twist that Goldman, the bank nearly everyone, including Lewis, seems to love beating up on, emerges as the new exchange's most prominent supporter - a savior of sorts - and that two Goldman executives, Ron Morgan and Brian Levine, are actually good guys. Lewis explains this seeming paradox with the observation, "It was a mistake to think of a bank as a coherent entity." Morgan and Levine "were not high-frequency trading types." Thanks to Goldman's support, Katsuyama's new exchange, called IEX, now seems well on its way to financial success, even though there's scant evidence it has made the slightest dent in the high-frequency trading that prompted its creation. It's a happy ending, of sorts. But Lewis might have pondered how frustrating it is for readers, and not just investors at Katsuyama's conference, to be told a story in which the villains aren't named. When Katsuyama declines to identify the bad bank, Lewis comes to his hero's defense, observing that "Brad was not by nature a radical." But a purported contest between good and evil in which all the characters are good quickly becomes dull, especially when the setting is as technical as high-frequency trading. The traders themselves remain faceless adversaries of Katsuyama and his buddies. Lewis never penetrates their high-tech lairs, or even seems to have tried. Who are these people? What are they like? How do they do what they do? How much money do they make and what do they do with it? And are they really so bad? (For answers to these questions, there's Scott Patterson's far more comprehensive and persuasive 2012 book, "Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market.") By the end of "Flash Boys," even Katsuyama seems to be having second thoughts about his high-frequency trader adversaries. "I hate them a lot less than before we started," he says. "This is not their fault. ... It's brilliant what they have done within the bounds of the regulation. They are much less of a villain than I thought. The system has let down the investor." That may be true, and to the extent "Flash Boys" focuses public attention on this system, it is a welcome addition to a growing chorus calling for further investigation and reforms, which may yet yield some results. In February the S.E.C. chairwoman, Mary Jo White, said the agency would intensify its scrutiny of high-frequency trading. And the New York attorney general, Eric T. Schneiderman, has started an investigation into the sale of trading data by exchanges. Given that the fourth anniversary of the flash crash is approaching, it seems not a moment too soon. How big a threat is high-frequency trading? Something certainly seems rotten here. JAMES B. STEWART writes the Common Sense column for the business section of The Times and is a professor at the Columbia School of Journalism. He is the author of nine books, including "Den of Thieves" and, most recently, "Tangled Webs."

Veteran actor Baker brings his distinct patrician manner, with its smooth elocution and precise pronunciation, to the audio edition of Lewis's investigation into the world of high-frequency stock trading. The book chronicles a new band of marketplace rebels who engaged in a David and Goliath battle with Wall Street to level the playing field for investors. Baker's polished vocal mannerisms, though characteristic of the stodgy stereotypes of today's business tycoons, provide an effective contrast with the diverse cast of outlaws in the book. Issues of ethnicity remain at the heart of this tension, as technically gifted Wall St. outsiders from around the globe fuel the movement with their discomfort of the mainstream American financial industry. Baker's portrayal of Russian immigrant programmer Sergey Aleynikov is especially striking and evocative. Though not quite as dramatic, Baker's voicing of Irish finance expert Ronan Ryan also leaves an impression upon the listener. A Norton hardcover. (Apr.) (c) Copyright PWxyz, LLC. All rights reserved.