The stock market is not rigged, but investors are being ripped off by high-frequency trading that takes "pennies off of everyone's trade" on an almost riskless transaction, Craig Hodges, co-portfolio manager of the Hodges Funds, told CNBC on Wednesday.
"I don't think 'rigged' is the right word. I think there's a fleecing going on of America," he said in a "Squawk Box" interview. "Basically, I have more respect for a guy that takes a gun and robs a store. At least there's a risk with him." Hodges acknowledged that high-speed trading does not effect his investing returns, "but it leaves a bad taste in our mouth."
His comments came a day after the heated debate on CNBC between IEX's Brad Katsuyama and BATS Global Markets President William O'Brien that stopped trading on the New York Stock Exchange floor. They battled over the premise behind Michael Lewis' new book "Flash Boys" in which Katsuyama is quoted as saying the stock market is "rigged" because of high-speed trading. Lewis was also on "Power Lunch" Tuesday.