Trump’s Newest Billionaire Appointee Made His Fortune With a Controversial Wall Street Tactic

Vinnie Viola, who made billions through high-frequency trading, is the nominee for secretary of the army.

Carl Juste/Miami Herald/ZUMA

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Donald Trump has selected yet another billionaire to join the ranks of his administration by tapping Vinnie Viola to be his secretary of the army. The job is not a Cabinet position—he will serve under the secretary of defense, a role for which Trump has tapped retired Marines Gen. James Mattis—but does require Senate confirmation. That means Viola’s vast personal wealth will be picked apart. And that could get complicated. Unlike other Trump appointees who made their billions in blockbuster deals, Viola earned his estimated $2.2 billion through lots and lots of very fast deals.

Viola attended West Point and joined the Army in 1977. He became an Army Ranger, jumping out of planes with the 101st Airborne. But he didn’t stay long in the military, leaving in the 1980s to join Wall Street.

It wasn’t until 2008 that Viola truly hit it big with the creation of Virtu Financial. The firm has since become one of the top 10 high-frequency trading firms—a form of trading that uses complicated algorithms, superfast computers, and artificial intelligence to make financial trades in mere fractions of a second. So before a person—or even a sophisticated trader—can learn of good or bad news and decide to buy or sell a stock, Virtu Financial has already bought or sold. It’s a complicated and controversial tactic; Michael Lewis detailed the downsides in his 2014 book Flash Boys. Critics of the methods used by Viola and other high-frequency traders contend that it allows these firms to front-run everyone else in the market, dulling the chances for others to make successful trades.

Whether its practices are fair or not, Virtu is extraordinarily successful. A Bloomberg profile of the firm reported that between 2009 to 2014, the firm lost money on only one day. Put another way, Viola and Virtu don’t win every time, just 99.94 percent of the time.

Thanks largely to Lewis’ book, which featured Virtu, the firm was the subject of a probe launched in 2014 by New York Attorney General Eric Schneiderman and a class-action lawsuit filed by the city of Providence and major pension funds. The suit accused Virtu and other high-frequency trading firms of taking unfair advantage of the rest of the market. It was eventually tossed out, and there have no been public signs that Schneiderman’s probe remains active. His office did not return a request for comment.

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate