When the book “Flash Boys” burst onto the financial scene in early 2014, it created a storm of controversy over “rigged markets” trading everything from Google, Apple and Facebook to General Electric, Ford and Proctor & Gamble. The resulting peek behind the curtain of high frequency trading (HFT) created a firestorm as the battle was characterized as “dirty.” A new shot was fired in that “dirty” battle Thursday, as a public comment from the stalwart New York Stock Exchange accused the up and coming hero of “Flash Boys” of not practicing what it preaches. In an exclusive statement to ValueWalk, the “hero” exchange responded.

One of the book’s primary charges that resonated with astute market participants was the lack of disclosure regarding trading rules. Order types were not fully disclosed and in general the appearance of two sets of rules, one for high frequency traders and another for the investing public, that raised knowing eyebrows. Transparency and allowing all market participants access to a level playing field were issues when author Michael Lewis released his book and remain so today, except the charges are being leveled at the book’s hero. After outlining the HFT problem in “Flash Boys,” Lewis introduced Brad Katsuyama and the IEX Exchange, who outlined a set of guiding principles based on fairness and equal access.  It is against this backdrop the New York Stock Exchange fired off a surprise comment letter Wednesday that publically challenged the IEX Exchange on, of all issues, transparency and fairness.

In a public comment letter on the IEX’s application to graduate from operating as a “dark pool” to becoming a full exchange and more actively competing with the NYSE on several levels, NYSE Vice President and Associate General Counsel Elizabeth King didn’t hold back punches. While commending IEX for the move into a tighter regulatory regime, King blindsided IEX by publicly attacking a disclosure deep behind how the exchange is operated. In humorous fashion, King claimed that IEX’s application was like an episode of the comedy “Seinfeld.”