FBI Examines High-Speed Trading

Just in time for the release of a new book by Michael Lewis on the shady practice of high-speed trading, the FBI has announced that it is looking into whether those firms are committing insider trading by acting on information unavailable to others. The probe, launched roughly a year ago, is examining the practice of placing trades and then canceling them, which can create the mistaken appearance of market movement. “There is a big concern that high-frequency traders are getting material nonpublic information ahead of others and trading on it,” said an FBI spokesman. Other government entities, including the Commodity Futures Trading Commission, are looking into relationships between high-speed traders and exchanges to see if the traders are getting better treatment at the expense of investors.