In his Vanity Fair article on Flash Boys, Michael Lewis describes the same pushback from Wall Street that I have experienced. In both cases, our goal is to end Wall Street’s ability to use opacity to rig the financial markets for the bankers’ benefit.

As he observed:

Of course, by trying to fix the stock market they also threatened the profits of the people who were busy exploiting its willful inefficiencies. Here is where it became inevitable that Flash Boys would seriously piss off a few important people …The Flash Boys story put in jeopardy billions of dollars of Wall Street profits and a way of financial life.

I too put billions of dollars of Wall Street profits and a way of financial life in jeopardy when I initially tried to bring transparency to the structured finance securities market.

So how did Wall Street respond to Michael Lewis and the people who were trying to end the ability to front run orders?

The narrow slice of the financial sector that makes money off the situation that Flash Boys describes felt the need to shape the public perception of it. It took them a while to figure out how to do this well.

In my book, I also describe how it has taken Wall Street a while to figure out how to shape the public perception about transparency. Wall Street’s initial response is to attack the messenger who says a) the financial markets are rigged and b) here is a simple solution for ending Wall Street’s ability to rig the financial markets now or in the future.

On the book’s publication day, for instance, an analyst inside a big bank circulated an idiotic memo to clients that claimed I had “an undisclosed stake in IEX.” (I’ve never had a stake in IEX.) Then came an unfortunate episode on CNBC, during which Brad Katsuyama was verbally assaulted by the president of the BATS exchange, who wanted the audience to believe that Katsuyama had dug up dirt on the other stock exchanges simply to promote his own, and that he should feel ashamed….

I too had the requisite hatchet job after I said Goldman Sachs had used its ownership of sub-prime mortgage originator and servicer Senderra to inform its decision to short sub-prime securities. This idea was held up for ridicule. Of course, the US government through a lawsuit against Goldman by the Federal Housing Finance Agency produced the emails to confirm what I had said.

After the personal attack stage, Wall Street shifts into fog mode.  They do this by forming what I refer to as the Opacity Protection Team.  The Opacity Protection Team includes not only Wall Street and its legal advisors, but the lobbyists and publicists they hire.

One of the roles of the Opacity Protection Team is to make an endless stream of false claims.  Each claim has a kernel of truth wrapped in a giant lie. Why do they make these false claims? Wall Street realizes without someone like myself to show why each is false some of these claims will start to be repeated and even picked up by journalists. As a result, Wall Street can begin to shape public perception so it no longer focuses on the facts, but rather begins to focus on the Wall Street created myths.

Based on what Michael Lewis said, he too had the same experience.

For the past 11 months, that’s been the pattern: the industry has spent time and money creating a smoke machine about the contents of Flash Boys but is unwilling to take on directly the people who supplied those contents.

On the other hand, it took only a few weeks for a consortium of high-frequency traders to marshal an army of lobbyists and publicists to make their case for them. These condottieri set about erecting lines of defense for their patrons. Here was the first: the only people who suffer from high-frequency traders are even richer hedge-fund managers, when their large stock-market orders are detected and front-run. It has nothing to do with ordinary Americans….

As time passed, the defenses erected by the high-frequency-trading lobby improved. The next was: the author of Flash Boys fails to understand that investors have never had it better, thanks to computers and the high-frequency traders who know how to use them. This line has been picked up and repeated by stock-exchange executives, paid high-frequency-trading spokespeople, and even journalists. It’s not even half true, but perhaps half of it is half true….

Finally there came a more nuanced line of defense. For obvious reasons, it was expressed more often privately than publicly. It went something like this: O.K., we admit some of this bad stuff goes on, but not every high-frequency trader does it. And the author fails to distinguish between “good” H.F.T. and “bad” H.F.T. He further misidentifies H.F.T. as the villain, when the real villains are the banks and the exchanges that enable—nay, encourage—H.F.T. to prey on investors….