3 ms·

Here's three SEC press releases that seem to indicate there's evidence of illegal front running: https://www.sec.gov/newsroom/press-releases/2021-118 https://w

by toast0 2y ago

Here's three SEC press releases that seem to indicate there's evidence of illegal front running: https://www.sec.gov/newsroom/press-releases/2021-118 https://www.sec.gov/newsroom/press-releases/2021-118 https://www.sec.gov/newsroom/press-releases/2021-186 https://www.sec.gov/newsroom/press-releases/2021-186 https://www.sec.gov/newsroom/press-releases/2022-228 https://www.sec.gov/newsroom/press-releases/2022-228 Trading ahead of index funds when an index change is announced is front running in my book, but it isn't illegal front running; but I don't consider it less acceptable than buying because the graph makes a funny shape.

gruez 2y ago
All 3 examples you provided are for people trading on material nonpublic information. In other words, some guy working at an asset manger knew they were going to execute trades on behalf of a client, and then made his own trade ahead of that. That's textbook front running, no denying it, but that's not anywhere close to what's happening with "ETF rebalancing" or PFOF. It's perfectly legal, for instance to speculate on whether TSLA or whatever is going to make it into the S&P 500 and "front run" that. It's also not clear why such trades would be immoral or unfair. >https://www.sec.gov/newsroom/press-releases/2021-118 https://www.sec.gov/newsroom/press-releases/2021-118 >Wygovsky repeatedly traded in his family members’ accounts held at brokerage firms in the United States ahead of large trades that were executed on the same days in the accounts of his employer’s advisory clients. >https://www.sec.gov/newsroom/press-releases/2021-186 https://www.sec.gov/newsroom/press-releases/2021-186 >Polevikov had access to real-time, non-public information about the size and timing of his employers' securities orders and trades, and used that information to secretly trade on, and ahead of, his employers' trades. >https://www.sec.gov/newsroom/press-releases/2022-228 https://www.sec.gov/newsroom/press-releases/2022-228 >Billimek would inform Williams of the asset management firm’s market-moving trades prior to their execution
- toast0 2y ago
  > but that's not anywhere close to what's happening with "ETF rebalancing" or PFOF. It's perfectly legal, for instance to speculate on whether TSLA or whatever is going to make it into the S&P 500 and "front run" that. It's also not clear why such trades would be immoral or unfair. I never said trading a stock ahead of it being added or removed to the S&P 500, or between the announcement of it being added or removed and index funds actually purchasing it is illegal, immoral, or unfair, or less acceptable than any other trade. Just that it's front running. And then you asked if there were examples of illegal front running, so I provided those --- which aren't examples of trading ahead of index funds, because trading ahead of index funds isn't illegal. I'm not really sure what you're asking at this point.

by toast0 2y ago

gruez 2y ago

All 3 examples you provided are for people trading on material nonpublic information. In other words, some guy working at an asset manger knew they were going to execute trades on behalf of a client, and then made his own trade ahead of that. That's textbook front running, no denying it, but that's not anywhere close to what's happening with "ETF rebalancing" or PFOF. It's perfectly legal, for instance to speculate on whether TSLA or whatever is going to make it into the S&P 500 and "front run" that. It's also not clear why such trades would be immoral or unfair. >https://www.sec.gov/newsroom/press-releases/2021-118 https://www.sec.gov/newsroom/press-releases/2021-118 >Wygovsky repeatedly traded in his family members’ accounts held at brokerage firms in the United States ahead of large trades that were executed on the same days in the accounts of his employer’s advisory clients. >https://www.sec.gov/newsroom/press-releases/2021-186 https://www.sec.gov/newsroom/press-releases/2021-186 >Polevikov had access to real-time, non-public information about the size and timing of his employers' securities orders and trades, and used that information to secretly trade on, and ahead of, his employers' trades. >https://www.sec.gov/newsroom/press-releases/2022-228 https://www.sec.gov/newsroom/press-releases/2022-228 >Billimek would inform Williams of the asset management firm’s market-moving trades prior to their execution

toast0 2y ago
> but that's not anywhere close to what's happening with "ETF rebalancing" or PFOF. It's perfectly legal, for instance to speculate on whether TSLA or whatever is going to make it into the S&P 500 and "front run" that. It's also not clear why such trades would be immoral or unfair. I never said trading a stock ahead of it being added or removed to the S&P 500, or between the announcement of it being added or removed and index funds actually purchasing it is illegal, immoral, or unfair, or less acceptable than any other trade. Just that it's front running. And then you asked if there were examples of illegal front running, so I provided those --- which aren't examples of trading ahead of index funds, because trading ahead of index funds isn't illegal. I'm not really sure what you're asking at this point.