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Larry Tabb argued in 2014 that high-frequency trading (HFT) did not make the U.S. equities market “rigged”: he said electronic competition had lowered execution costs and that fast trading firms could contribute to price discovery. That was his position in a specific debate, not a settled verdict about HFT or a confirmed statement of his current view.
Who is Larry Tabb?
Larry Tabb founded TABB Group, a capital-markets research firm founded in 2003, according to the firm’s about page. A U.S. Senate hearing notice identifies him as the firm’s founder and CEO when he appeared at a September 20, 2012 hearing on computerized trading and the rules of the road. The notice establishes his role as a witness, not what he said in testimony. The hearing notice is useful context for his involvement in market-structure discussions.
What did Tabb argue about HFT?
In a 2014 response to the public discussion surrounding Michael Lewis’s Flash Boys, Tabb rejected the claim that the U.S. equities market was rigged. The response, republished by MarketScreener, attributes to him the line: “No, Michael Lewis, the US equities market is not rigged.” He argued that fragmented electronic markets competed with one another, making trading less expensive, faster, and more open. Read Tabb’s 2014 response.
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Tabb’s case was that market makers, speculators, proprietary traders, and HFT firms could all post quotes that help reveal supply and demand. He also argued that speculators serve a price-discovery function, saying: “While virtually everyone hates speculators, the fact is that they do form what is one of the most important functions of a market – determining price.” These are his arguments, not proof that every HFT strategy improves prices or benefits every investor.
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Tabb also acknowledged that differences in trading speed and the fragmentation of venues can create market leakage. His response argued that leakage did not mean prices stopped reflecting supply and demand, and that leakage was declining at the time. Both the assessment and the trend claim belong to his 2014 argument; they should not be read as a description of conditions in 2026.
Is high-frequency trading good or bad for the market?
There is no single answer in the cited material. HFT is a broad category of fast, computer-driven trading, and the market effects depend on what a strategy does, how it behaves under stress, and how an investor’s orders are routed. Tabb emphasized competition, lower execution costs, and price discovery. A 2010 SEC market-structure roundtable recorded a wider range of views: participants discussed potential benefits such as liquidity, narrower spreads, price discovery, and lower transaction costs, as well as concerns about predatory strategies, instability, and market malfunctions. The transcript records participant debate; it is not a single SEC conclusion. SEC market-structure roundtable information and transcript.
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To assess a claim that HFT is helping or harming markets, it is useful to ask:
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- Liquidity and spreads: Are accessible buy and sell quotes available, and do they remain available when volatility rises?
- Execution costs: Do narrower quoted or effective spreads translate into cheaper executions for investors after fees and routing effects?
- Price discovery: Do fast traders incorporate information and connect fragmented venues, or does a speed advantage create harmful information asymmetry?
- Resilience: How do strategies respond to sudden order imbalances, erroneous trades, or market stress?
- Competition and access: Does having multiple venues increase choice and innovation while making order routing and oversight more difficult?
The roundtable and Tabb’s response supply arguments and questions for this assessment, not settled answers to each one.
How to interpret Tabb’s historical figures
Tabb’s 2014 response cited TABB Group estimates of U.S. equity trading revenue generated by HFT firms: approximately $7.3 billion in 2009 and approximately $1.3 billion at the time of the response in 2014. These are historical estimates as attributed in that response, not current revenue figures or measures of HFT’s overall benefit to investors. The figures should be kept with their original years and attribution rather than used to describe today’s market.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What is and is not established about his current view?
The clearest directly attributed argument covered here is from 2014. Tabb was also identified as founder and CEO of TABB Group at the 2012 Senate hearing on computerized trading, but the hearing notice alone does not establish his views. A TABB Group announcement about a 2009-era report co-authored by Tabb says it covered HFT strategies, market structure, pros and cons, and regulatory issues; it is not evidence of his current position. TABB Group’s report announcement. The cited material does not establish a newer, direct statement focused specifically on HFT, so it would be inaccurate to present the 2014 argument as his current view.
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