Flash Boys Star IEX CEO Katsuyama on disrupting Wall Street

Brad Katsuyama, chief
executive of IEX Group
REUTERS/Eduardo
Munoz

• Brad Katsuyama, the CEO of upstart stock exchange IEX,
  didn’t realize how hard disrupting Wall Street would be.
• Katsuyama, who came to prominence as the star
  of Michael
  Lewis‘ 2014 best-selling “ Flash Boys,”
  said without the book, “I’m not sure if I’m sitting here
  for a stock exchange right now.” 
• Katsuyama spoke on Tuesday at Business Insider’s IGNITION
  2018 conference. 

Disrupting Wall Street is hard.

Brad Katsuyama,
the CEO of upstart stock exchange IEX, just didn’t realize how
hard.

“There was a naivety about me in thinking there was going
to be a fight, but not fully appreciating how big of a fight it
would be,” he said on Tuesday at Business Insider’s IGNITION 2018
conference in New York.

Katsuyama, who came to prominence as the star
of Michael
Lewis‘ 2014 best-selling “ Flash Boys,”
said without the book, “I’m not sure if I’m sitting here
for a stock exchange right now.” 

Katsuyama founded IEX in 2012 as a new trading venue that aims to
thwart the advantages that he says predatory high frequency
traders enjoy on incumbent exchanges like the New York Stock
Exchange and Nasdaq. 

But by setting out to change how traditional US stock markets
function, Katsuyama found himself fighting against big Wall
Street players. 

Read more:

Upstart exchange IEX snags its first listing from Nasdaq

“Anytime you want to make something simpler, the people who
benefit from the complexity do not want that to happen,” he said.
“Michael [Lewis] said, ‘if you’re taking billions of dollars out
of people’s pockets, they’re going to be really angry.'”

Up next for IEX is a building out a new listings business.

In September, the exchange snagged its first listing, Interactive
Brokers, from rival Nasdaq. A boost in the number of
companies listed on IEX would likely mean an increase in the
amount of trading that takes place on it, as stocks are more
likely to trade on the exchange on which they are
listed. 

Katsuyama said his pitch to companies to switch their listing
venue over to IEX is simple.

“We’re the only stock exchange that aligns the interests of
investors and companies,” he said. “When we talk to companies, we
say you and the investor are the two most important parts of the
market and we have tremendous support from investors and we want
to build a relationship with you. Most of them haven’t been
talked to that way … we’re different, we stand for something,
we’re a value-based decision and a lot of CFOs are trying to make
value-based decisions.”

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IEX CEO Brad Katsuyama talks about life after ‘Flash Boys’ and
how he’s taking on the New York Stock Exchange and Nasdaq