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High-speed trading is like Disneyland: Ex-SEC chair

Major stock exchanges could learn a lot from amusement parks and ski resorts, former SEC chief Richard Breeden told CNBC on Wednesday.

As the debate over high-frequency trading reaches a fever pitch, Breeden said exchanges and regulators need to make sure investors and traders have equal access to high-speed cables, but that there was nothing wrong with charging more for them. That happens at Disneyland, of all places, said Breeden, who served as SEC chairman from 1989 to 1993.

"You can go to Disneyland, they'll sell you a pass that for an extra cost will put you at the front of the line," he said on "Squawk Box." "You can go to ski resorts that do the same thing. There's nothing inherently wrong with [it]. If speed is more important to you, you pay a higher price for it."

Read MoreWatch the fight that stopped trading at the NYSE

On Tuesday, SEC Chair Mary Jo White said her commission has several active investigations into high-frequency traders. The disclosure comes on the heels of a heated public debate over whether high-frequency trading has "rigged" the stock market, a claim made by financial journalist Michael Lewis in his new book, "Flash Boys."

Breeden disagreed with that assessment.

"The markets aren't rigged," he said. "It doesn't mean they're risk free. It doesn't mean you can't get hurt."

Among his more serious claims, Lewis says high-speed traders were able to front run orders, or buy a stock before investors do, and then sell it back to them. Breeden called that a "real issue." But a regular investor who buys Tesla below its peak, for example, won't feel many effects from high-frequency trading, he said. That investor still benefits from the purchase, regardless of whether a high-speed trader scalped a penny off the deal, Breeden said.

Read MoreSEC chair discusses probes into high-speed trading

Exchanges that offer higher speeds and data servers to the high-frequency traders have come under scrutiny this week, and Breeden said exchanges have had a conflict between their profits and the interests of regular investors for a long time.

"The SEC is supposed to police that, and I think given a chance they will," he said.

—Reuters contributed to this report.

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