Front running charges arise when stockbrokers are said to have received orders from their customers but first purchased security on their own accounts, thereby affecting prices. These stockbrokers then allegedly sell their personal stock at a profit based on the new price level.
Some front running breaks U.S. laws on Market Manipulation and Insider Trading, but not all front running is illegal (or even preventable). A trader may be able to guess another stockbroker's next moves due to experience and intuition, the same way you can finish sentences for someone you know very well. There are also extensive gray areas surrounding research front running (trading in a security before an analyst formally changes his opinion) as well as when exactly information becomes "public". Still, front running convictions can result not only in civil penalties, but jail time as well.
Allegations of front running can be hard to fight (investigation is intrusive and prosecution aggressive), but these accusations can also be hard to prove. If you have been confronted with charges of front running, there are various strategies that can protect you from being penalized when you have not done anything wrong. Securities Lawyers at The Blanch Law Firm can help. For a free initial consultation, Contact one of our front-running attorneys by calling 888-984-5579 .