Charles Schwab Corp. (SCHW) Chairman Charles Schwab and CEO Walt Bettinger spoke out against high-frequency trading on Thursday, calling it "a growing cancer that needs to be addressed."
"High-frequency traders are gaming the system, reaping billions in the process and undermining investor confidence in the fairness of the markets," Bettinger and Schwab said in a statement. "If confidence erodes further, the fuel of our free-enterprise system, capital formation, is at risk."
Bettinger and Schwab said the HFT system is designed to "pick the pockets of legitimate market participants."
They added that more than 95 percent HFT orders were canceled last year, an event that they said suggests that "something else besides trading is at the heart of the strategy."
Lewis Kaufman of Thornburg Investment Management echoed their sentiments.
He said the credibility of the stock market is "incredibly important" for investors and noninvestors and it hinges on HFT regulation.
"We have to know what's going on," Kaufman said on CNBC's " Squawk on the Street " on Thursday. "We cannot have our markets unregulated, we know what happened with derivatives when we didn't have derivatives regulated."
He said the lack of regulation played a big part in the financial meltdown.
HFT has been in the news this week after author MIchael Lewis alleged the stock market is "rigged" by high-frequency traders, because they are able to front run orders.
A problem that Lewis says is plaguing the stock market.
-By CNBC's Karma Allen.