FBI investigating high-speed trading outfits

Tags: News
US federal agents are investigating whether high-speed trading companies violate U.S. laws by using fast-moving market information not available to other traders, a FBI spokesman confirmed on Monday.

Launched by the Federal Bureau of Investigation about a year ago, the investigation called the High-Speed Trading Initiative, is still in its primary stages, a senior FBI official and an agency spokesman told the Wall Street Journal, which first reported the story.

The spokesman who spoke to the Journal said high-speed trading based on information about orders that other investors do not have access to and hence putting them at a disadvantage could violate insider-trading laws.

Separately, an FBI spokesman, who did not want to be identified by name, told Reuters the agency was probing high-frequency traders front-running others' trades by getting to exchanges first, among other areas.

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

The FBI has deployed a large number of agents, looking at proprietary-trading outfits as well as fast-trading operations at brokers who buy and sell orders on behalf of clients, such as mutual funds and pension plans, the Journal said.

Regulators, including the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Financial Industry Regulatory Authority that oversees broker dealers are working with the FBI on the probe, the Journal reported.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Kerala, god’s own country, will always be free spirited

    Candy is dandy, but liquor is quicker,” the celebrated American poet Ogden Nash had once said famously.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Varun Dutt

<b>Riskfactor</b>:The over-the-top effect effect

The overconfidence effect is a bias in which someone’s subjective ...

Parvez Imam

The absoluteness in representations

When a representation replaces the original object or subject, a ...

Dharmendra Khandal

Religion and conservation must go hand in hand

In 1986, former president of WWF International, HRH Prince Philip, ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture