Newspaper article International New York Times

'Flash Boys' Provides New Exchange a Boost ; IEX Raises $75 Million after It Was Profiled in Book by Michael Lewis

Newspaper article International New York Times

'Flash Boys' Provides New Exchange a Boost ; IEX Raises $75 Million after It Was Profiled in Book by Michael Lewis

Article excerpt

IEX was created to temper high-frequency traders' advantages and was profiled in Michael Lewis's book "Flash Boys."

Until March, few outside of Wall Street had heard of IEX, an upstart stock-trading platform aimed at tempering the advantages of big financial firms and their superfast computers.

Then Michael Lewis came along.

Thanks in part to attention brought in by Mr. Lewis's book "Flash Boys," which profiled the team behind IEX, the trading platform has raised $75 million in a new round of financing. That money will help the start-up become a full-fledged stock market.

Several investors -- the venture capital firms Spark Capital and Bain Capital Ventures; Massachusetts Mutual Life Insurance and the mutual fund manager Franklin Templeton; and the Netscape co-founder James H. Clark and the casino billionaire Steve Wynn -- participated in the round.

More than a few of those investors became aware of IEX after the media blitz that attended the publication this spring of "Flash Boys," an in-depth look at the world of high-frequency trading. Mr. Lewis has argued that Wall Street's giants, relying on high-powered computer algorithms and expensive data connections, have become too powerful and take advantage of regular traders.

"We feel lucky that our company's story was told in the way that it was told," Brad Katsuyama, IEX's chief executive, said in an interview. "I think that without the exposure we got, we wouldn't be able to reach those people."

IEX, which opened its doors only last year, is meant to chill that computerized arms race, slowing down orders to stymie high- frequency traders. But its mission received a huge dose of publicity when Mr. Lewis's book came out -- drawing eager would-be investors out of the woodwork.

One was Alex Finkelstein, a partner at Spark Capital, who happened to read the book on vacation alongside a Wall Street trader. As their children played together in the resort's pool, Mr. Finkelstein asked his new friend whether "Flash Boys" reflected reality. …

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