Regulators are investigating Bank of America for front running its clients' large trading orders, according to documents reviewed by Reuters reporters Karen Brettell and Aruna Viswanatha.
Front running is a pretty simple trick. You (the bank) know your client is going to place a big order for a security. Since you know the price of the security will go up after that big buy, you place the bank's order ahead of your client's order.
Sometimes this results in the price of the security going up for your client.
In this case, according to Reuters, that client was Fannie Mae and Freddie Mac.
Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I’ll be subscribing to your feed and I hope you post again soon. faysal bank car financing calculator | apply for hbl credit card
ReplyDelete