Comment Re:Banks deflecting attention from themselves (Score 1) 342
Well, technically HFT is illegal, it is just a matter of if a judge will agree hold them to it or not. Generally courts have found, well, at least for small fries, novel technical solutions do not make something legal when doing it by hand would not be. HFT is automated front running, nothing more.
It is clearly illegal for your broker to purchase or sell securities on their own account before making the trades that you have ordered - that's the "classic" front running.
But I don't think it is illegal for a third party to use public information to make a trade. If you loudly tell someone on the bus that you are going to order a million shares of XYZ Corp as soon as you get to the office (maybe because E.F. Hutton told you to, a la classic 19870s commercial: https://www.youtube.com/watch?... ) anyone on that bus is free to whip out their smartphone and "front-run" you. I don't know that I would even call this type of thing unethical.
Figuring out technical solutions to this type of "abuse" by introducing delays or taxes is probably better than trying to prohibit them within a legal framework.