Bats President Who Rebuked Michael Lewis Leaves Exchange

Bill O’Brien
Bill O’Brien played a central role in the debate spurred by Michael Lewis’s “Flash Boys,” which blasted Bats Global Markets Inc. and other key players in the stock market. Photographer: Ramin Talaie/Bloomberg

Bill O’Brien, the former Goldman Sachs Group Inc. executive who built Direct Edge Holdings LLC into one of the biggest U.S. stock exchanges, is leaving the firm after merging it with Bats Global Markets Inc.

Joe Ratterman, the chief executive officer of Bats, will assume O’Brien’s role as president, according to a statement. The departure is effective immediately.

O’Brien, 43, played a central role in the debate spurred by Michael Lewis’s “Flash Boys,” which blasted Bats and other key players in the stock market. The Bats executive appeared on CNBC a day after the best-seller came out to spar with Lewis and IEX Group Inc. CEO Brad Katsuyama, the hero of the book. Their heated exchange captivated Wall Street. Later that week, Bats was forced to correct something O’Brien said about the speed of his company’s technology systems.

Richard Repetto, an analyst covering exchanges at Sandler O’Neill & Partners LP in New York, said O’Brien’s departure surprised him.

“I thought they were a good team, and they worked together well,” he said.

Bats officials won’t be commenting on the departure beyond the company statement, spokesman Jim Gorman said in an e-mail.

Lewis’s argument that U.S. stock trading is rigged reflects a misunderstanding of how the market operates and its history, O’Brien said during the April 1 appearance on CNBC.

‘Shame on Both’

“Shame on both of you,” he said during the interview, addressing Lewis and Katsuyama.

O’Brien became president of Bats following the merger with Direct Edge, which was completed in January. The deal created an exchange operator to rival Intercontinental Exchange Inc.’s NYSE Group and Nasdaq OMX Group Inc. NYSE’s stock markets handled

22.6 percent of U.S. volume in June, versus 19.6 percent at Nasdaq and 19.2 percent at Bats, according to data compiled by Bloomberg.

After graduating from the University of Notre Dame in 1992, O’Brien went to law school at the University of Pennsylvania and then joined law firm Orrick, Herrington & Sutcliffe LLP in 1995. He worked for attorney Sam Miller, a former partner at Paine Webber who focused on broker dealers and market regulation. Miller counted Instinet, one of the original electronic trading networks, as a client.

A two-year stretch as an assistant general counsel at Goldman Sachs followed. O’Brien left Goldman to become general counsel and later chief operating officer at Brut LLC, another of the original electronic communication networks, or ECNs, that helped reshape how stocks changed hands in the U.S.

Nasdaq bought Brut in 2004, and O’Brien joined the second-largest exchange operator. He left Nasdaq to become Direct Edge’s CEO in 2007.

“What excited me the most was that I felt like we had the potential to break that oscillating wave of competition and consolidation,” he said during an interview with Bloomberg News that was published in February.

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