3 ms·

You do realize that this is actual frontrunning, as in a broker frontrunning its clients, and not arbitrage on the market or an HFT getting a sneak peak at the

You do realize that this is actual frontrunning, as in a broker frontrunning its clients, and not arbitrage on the market or an HFT getting a sneak peak at the order feed from say NYSE? Also, this is a dark pool literally operated by an HFT - I'm referring to the lit market under SEC regulation. This pool isn't even available to retail traders, not to say that excuses frontrunning. Their punishment was fairly light as well, unfortunately. Edit: It looks like ITG is a tech provider that illicitly used info from the dark pool to run a trading desk. If you look at their disclosures on prop trading, it seems their trading was minor and linked to their frontrunning operation. I think most if not all of the prop trading they do is shut down. I've also edited my parent post to be more clear.

dxhdr 10y ago
Here's another one from just last week: https://www.sec.gov/news/pressrelease/2017-11.html https://www.sec.gov/news/pressrelease/2017-11.html That doesn't explicitly mention frontrunning but it's guaranteed that's what they were doing. These guys aren't dumb. By "arbitrating broken market rules" I meant that these HFT firms are exploiting our dysfunctional market system at no risk to themselves (like Virtu's single-day loss in a 6 year period). They engage in things like quote stuffing which incidentally increases volatility, decreases liquidity and leads to higher trading costs. For quote stuffing in particular the SEC investigated and decided to do nothing. The SEC is fully incompetent as the ITG and Citadel slap-on-the-wrist fines for outright illegal activity further demonstrate. My point about HFT firms being frontrunning scams is basically true.