High-frequency trading is just another example of Wall Street greed and should be investigated, if not mitigated by a speculation tax, consumer advocate Ralph Nader told CNBC on Wednesday.
"What most people don't know is the vast majority of stocks that are traded, and derivatives and options and calls, are high-frequency traded," Nader said on "Squawk on the Street."
"I mean it is not just disrupting the fair marketplace for ordinary investors and chipping off pennies that amount to billions of dollars over the years. It's actually the bulk of the trading and that means that Wall Street has moved into a completely speculative realm of behavior when it was established many years ago to engage in investment."
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Nader, who gained attention in the mid-1960s for criticizing car companies for a lack of safety features, praised Michael Lewis for his new book, "Flash Boys," in which he alleges that high-frequency traders are able to buy stocks ahead of most investors and then sell those shares at a much higher price.
"Michael Lewis has performed another public service. He humanizes these inhuman definitions of greed on Wall Street, and therefore his book is putting heat on, as we speak, on the Securities and Exchange Commission, on the New York Stock Exchange and others."
SEC spokesman John Nester declined to comment on the book, but noted that "The staff, at Chair [Mary Jo] White's direction, is conducting a comprehensive data-driven analysis of a range of market structure issues, including high frequency trading practices and their impact on the fairness, efficiency and integrity of our markets."
In response to the speculative environment that produced high-frequency trading, Nader proposed imposing a speculative tax on Wall Street, though he didn't go into details.
—By CNBC's Drew Sandholm.