Bank of America and the New York Stock Exchange were among dozens of exchanges, brokerages and traders sued over high-frequency trading by the city of Providence, Rhode Island, over claims they rigged securities markets to divert billions of dollars from buyers and sellers of shares.
Bloomberg reports that scrutiny of high-frequency trading and whether it gives some investors unfair advantage intensified this year amid government probes and the March 31 publication of 'Flash Boys' by Michael Lewis.
The lawsuit filed last week is one of the first by an institutional investor since U.S. Attorney General Eric Holder in March promised Congress a full investigation into whether high-frequency traders violated laws against trading on inside information.
One defendant in Providence’s complaint, Virtu Financial, a high-frequency trader that delayed its initial public offering, has received inquiries from the office of New York’s attorney general, Eric Schneiderman, according to a person familiar with the matter. Schneiderman announced last month that he’s investigating high-frequency traders.
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