[harryh]

Your understanding of what defines front running is incorrect.

Front running is when your stock broker gets an order from you but then turns around and executes an order on his own behalf before he executes yours. This is illegal because your broker has a fiduciary duty to you, his client.

It's not front running when I see an order on one exchange and then, very quickly, go make an order on a different exchange. It's not illegal because I have no fiduciary responsibility to any of the other people involved.

You have no right to execute multiple orders on different exchanges atomically.

[Animats]

If someone paid for order flow or fast access so they could do that, it's illegal.

[tptacek]

If that's true, you should be able to cite a statute, an SEC/FINRA/CFTC rule, a court ruling, or an exchange rule to explain how (allowed and prohibited behavior on markets being defined by all four of those kinds of sources, frustratingly enough).

I suspect you won't be able to find any such source. Malfeasance by trading firms makes career cases for prosecutors.

That's not to say, normatively, that that's how things should be: obviously, prosecutors are not making much of a dent in the trustworthiness of big financial firms.

[harryh]

No. It's not.

Once orders hit the market it's public information and you can do whatever you want with it. If you can do it faster than anyone else then go you!