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E-mail ID will not be published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

  • Child abuse needs to be tackled with the seriousness it deserves

    The Bangalore rape case has again brought into focus an issue we Indians forever shy away from facing up to — child sexual abuse.

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 BASE RATE BIAS

Base rate fallacy, also called base rate neglect or base ...

Parvez Imam

Revisiting history can do us all good

We often think that we understand history. We read it ...

Bubbles Sabharwal

Your happiness doesn’t depend on your needs

They are two different words (and even worlds) altogether: having ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture