--- description: Investigators are seeing if Wall Street's rapid traders are using insider trading to gain a market advantage over the competition title: Finance: FBI Probes High-Speed-Trading Firms image: https://static.time.com/v3/assets/bltea6093859af6183b/bltde093bcdab65f2d0/6988d9b9bc6cfc69913e2a3c/time-logo.jpg?branch=production --- * [World](/section/world/) ## World Update your preferences in [Account Settings](/account/preferences/) Close * [wall street](/tag/wall-street/) ## wall street Update your preferences in [Account Settings](/account/preferences/) Close # High-Speed Trading Gets Scrutiny Again, This Time From the Feds by [David Stout](/author/david-stout/) ## David Stout Update your preferences in [Account Settings](/account/preferences/) Close Apr 1, 2014 8:02 AM CUT by [David Stout](/author/david-stout/) ## David Stout Update your preferences in [Account Settings](/account/preferences/) Close Apr 1, 2014 8:02 AM CUT Federal investigators are currently probing high-speed-trading firms to see if the outfits are [practicing a form of insider trading](http://online.wsj.com/news/articles/SB10001424052702304886904579473874181722310?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304886904579473874181722310.html&fpid=2,7,121,122,201,401,641,1009 "undefined") — that is, making deals based on nonpublic market information. High-speed-trading firms use powerful computers to process trades in fractions of a second, taking advantage of tiny price fluctuations. A new FBI inquiry will seek to establish whether traders are abusing information in doing so, the _Wall Street Journal_ reports. Authorities are probing if the trades, which are based not on human decisions but computer algorithms, could be classified as wire or securities fraud — although it may be more difficult for prosecutors to prove nefarious intent is present in the case of computer trades. New York State Attorney General Eric Schneiderman and financial regulators are also examining the activity of these firms. Schneiderman’s office is looking into whether high-speed or rapid-fire traders receive unfair advantages from U.S. bourses, [Bloomberg](http://www.bloomberg.com/news/2014-03-31/fbi-said-to-probe-high-speed-traders-over-abuse-of-information.html "undefined") reports, and also whether the information purchased by such traders from expensive research firms — which market their products based on exclusivity, speed and depth of detail — amounts to nonpublic information. “There is a big concern that high-frequency traders are getting … nonpublic information ahead of others and trading on it,” an FBI spokesman told the _Journal_. The FBI is also taking a closer look at the reported practice of placing a group of trades and then rescinding them in order to create the illusion of market activity. Many critics of high-speed firms have accused them of creating market instability. About 90 people have been charged with insider trading by the U.S. attorney’s office in Manhattan since 2009. \[[_WSJ_](http://online.wsj.com/news/articles/SB10001424052702304886904579473874181722310?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304886904579473874181722310.html&fpid=2,7,121,122,201,401,641,1009 "undefined")\] ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/44880/insider-trading-fbi-investigation/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/44880/insider-trading-fbi-investigation/"},"headline":"High-Speed Trading Gets Scrutiny Again, This Time From the Feds","datePublished":"2014-04-01T08:02:36.000Z","dateModified":"2026-02-21T07:03:58.010Z","description":"Authorities are probing whether firms utilizing high-frequency trading are doing so in a way that is tantamount to insider trading as they process deals in tiny fractions of a second. 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