Fairfield 's Ronan Ryan of "Flash Boys" explains new Stock Exchange
Ronan Ryan ’96 walked away from a million-dollar-a-year salary to take a chance at starting a new, revolutionary business on Wall Street.
If his name sounds familiar, you might be a viewer of “60 Minutes,” a reader of The New York Times Magazine, or owner of a likely dog-eared copy of “Flash Boys,” the New York Times best-seller by Michael Lewis, author of “Moneyball” and “The Blind Side.” Published earlier this year, the page-turner explores how high frequency traders can create a rigged market.
On November 3rd, Ryan returned to his alma mater to talk to students — many of them finance majors — about how he and a small group of colleagues started a new stock exchange, IEX, aimed at leveling the playing field for all investors. The event was sponsored by Fairfield University’s Charles F. Dolan School of Business as part of its Dean’s Lecture Series.
IEX is the first equity trading venue financed by a consortium of buy-side investors, including mutual funds, hedge funds, and family offices. Dedicated to institutionalizing fairness in the markets, IEX provides a more balanced marketplace via simplified market structure design and cutting-edge technology that prevents front running and pricing unfairness in the market.
In a gripping and entertaining talk, Ryan, a central figure in creating the IEX exchange, described what amounts to a quest to reassert fairness in trading. “We believe in what we are doing,” said Ryan to the attentive audience of students, faculty, and staff. “You can actually do something good for the stock market. We know we have a lot of work to do.”
Ryan was born in Ireland and moved with his family to Greenwich, Conn., when he was a teenager. He had always wanted to work in the financial industry. He shared how he interned at Chemical Bank while an undergraduate. His first job after graduating was working for MCI. Even though he was not trained in technology, he was hired and the position proved pivotal to what he is doing now. It helped him understand the technological infrastructure behind high frequency trading.
“You make your own luck,” said Ryan, who had yearned to get into the ‘business side’ of trading. “I made my own luck by making myself a repository for all this information.”
Ryan had no idea that Flash Boys would focus on him and his colleagues. At first, it was just a kick to go out to dinner with Lewis and chat. “I would have gone to McDonald’s with him,” said Ryan.
Author Lewis has a history of exposing Wall Street malfeasance in his books. Flash Boys is a bit of a departure. Instead, he profiles people who saw unethical and very profitable behavior; rather than join in, they have done something to reduce and maybe end it.
Dr. Michael Tucker, professor of finance in DSB, thought his students would greatly benefit from hearing Ryan’s story.
“From Ryan and the perspective of the team he works with, there may be more to working on Wall Street than making inordinate amounts of money,” Dr. Tucker said. “Some traders were profiting from taking advantage of prior knowledge of trades about to be made, resulting in billions of profits for them at the expense of investors. Regulators can’t fix all problems. Sometimes it takes people dedicated to creating a workable solution.”
Ultimately, Ryan’s actions speak to Jesuit values. “Ronan’s Wall Street success story is not simply about making money, it’s also about acting ethically even when faced with a pay cut,” Dr. Tucker added.
To students, Ryan’s passion for his work is infectious.
Anthony Cucuzza ’15 found Ryan's anecdotes about his path to IEX engaging. “I would have to say I learned a great deal of how the stock markets have moved, along with the rest of the world, into the digital age and how Ryan’s IEX is looking out for the everyday investor in this high speed electronic trading world,” said Cucuzza, a finance major. “I thought the talk was excellent... Most importantly, it was great to hear the values of hard work and persistence and see them come to fruition in a fellow Fairfield Stag.”
Brandon Nicodemo ’15, also a DSB student, agreed.
“I am of the opinion that Mr. Ryan was by far the most interesting and informative speaker that I've seen in my four years here at Fairfield,” said Nicodemo. “I was honestly hoping he'd just keep talking when his time was up. He is an incredibly interesting person and had a lot to say. He is an example of how the typical smart, personable Fairfield kid can make it in the finance world.”