Attorney Authored
High-Frequency Trading Firms in the Enforcement Crosshairs
December 12, 2014
BY ERIC H. SUSSMAN, TERRA L. REYNOLDS, EMILY N. DILLINGHAM, CHRISTOPHER F. ALLEN & EMILY L. SEYMORE
Right on the heels of Flash Boys, Michael Lewis’s bestselling book detailing the darker side of highfrequency trading (HFT), government regulators launched a series of high-profile investigations targeting many of the largest trading firms in the U.S. These investigations, led by the Department of Justice, the Commodity Futures Trading Commission, the Securities and Exchange Commission and the New York attorney general, have resulted in a series of charges against U.S. HFT firms and, most recently, the first federal criminal prosecution against a high-frequency trader. While the accusations of fraud have been widespread, it remains uncertain whether these investigations are limited to rogue traders engaging in abusive trading practices or whether enforcement authorities are seeking to cast a wider net over what were once believed to be commonly accepted practices of HFT firms.
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