WASHINGTON (REUTERS) - The US Securities and Exchange Commission needs more money to properly police equity markets and detect potential misconduct, especially in a world of rapid-fire trading, SEC Chair Mary Jo White told lawmakers on Tuesday.

"We... have focused intensively on potential misconduct in the equity markets," White told a US House of Representatives appropriations panel in prepared testimony.

"But detecting misconduct in constantly evolving securities markets, including as a result of the growth of algorithmic, automated trading and 'dark pools,' requires substantial resources," she added.

The SEC is seeking a US$1.7 billion (S$2.14 billion) budget for fiscal 2015, up from its current budget of US$1.35 billion.

Her comments came as bestselling author Michael Lewis has published a new book on the role of high-frequency traders, adding fuel to the debate on whether they help or harm the marketplace.

The book, "Flash Boys: A Wall Street Revolt," alleges that high-speed traders have rigged the stock market and use their speed advantage to trade ahead of ordinary investors.

On Monday, the FBI confirmed it has been conducting a wide-ranging probe into high-speed trading for months, an outgrowth from the years-long crackdown on insider-trading.

A spokesman who did not wish to be named said Monday night that the FBI was investigating whether high-frequency traders are front-running others' trades by getting to exchanges first.

A big trade, such as bank shorting a million shares of a company under investigation, could be considered a material event, the spokesman added.

In addition, a person familiar with the FBI probe told Reuters on Tuesday that the FBI is also looking at other areas, such as whether high-speed firms can cut the line in terms of how security orders are placed or are engaged in "spoofing"trades that are not really trades to give the illusion of market activity.

For years, the SEC has been looking into high-speed trading and "dark pool" trading, which takes place away from major exchanges. Regulators are concerned that some ordinary investors may be at an unfair disadvantage.

In the last year, the SEC started subscribing to the same proprietary data trading feeds that the high-speed traders use, in an effort to better understand how the markets are functioning.

So far, the SEC has not determined whether to propose any additional rules are in order to address high-speed trading.