Stiglitz, TIAA-CREF CEO Blocked From SEC Panel

The panel is expected to include representatives of Wall Street brokerage firms and academic researchers. IEX Corp. Chief Executive Officer Brad Katsuyama is expected to be named to the panel, two people with knowledge of the matter said.

Katsuyama garnered attention as a key figure in “Flash Boys,” Michael Lewis’s 2014 book about high-frequency trading. He started the IEX trading platform with the aim of leveling the playing field for investors by curbing the pace of buying and selling -- eliminating opportunities for the fastest firms to trade in front of slower ones. He has said the government should consider forcing greater transparency of trading venues’ operations.

Stalled Enforcement

IEX spokesman Gerald Lam declined to comment about Katsuyama’s participation.

High-frequency trading, which uses computer algorithms to buy and sell large numbers of shares in fractions of a second, accounts for more than 50 percent of U.S. trading volume.

The dust-up over Stiglitz is emblematic of the frequent conflict among commissioners that has slowed progress on regulatory policy and enforcement matters under White. A recent case against Bank of America Corp. was stalled for three months as commissioners, divided along political lines, fought over additional penalties that could have expelled the bank from the profitable business of raising money for private companies.

“Financial markets are important and I have been worried about the way they have been working and whether they are serving the American economy,” Stiglitz said. “I was willing to serve. The next thing I knew, I was told you didn’t get it.”

Aguilar confirmed that he recommended Stiglitz but declined to talk about the panel’s membership. “I thought he would do a fantastic job as a Nobel-winning economist and someone who is well-informed about how the market structure works,” Aguilar said.

A former chief economist of the World Bank, Stiglitz argued in an April speech that high-frequency trading can make markets less efficient while driving other investors to cloak their orders by placing them away from exchanges using dark pools, leading to less transparency.