Exchanges, Brokers, High-Speed Firms Sued In Class Action Alleging Market Manipulation

Shareholder plaintiffs have filed a wide-ranging class action in the U.S. District Court for the Southern District of New York alleging that the national securities exchanges and large brokerage firms gave high-frequency traders preferred access and other advantages in exchange for kickbacks (City of Providence v. BATS Global Mkts Inc.).

The complaint, filed April 18 on behalf of the city of Providence, R.I., alleges that over the last five years, high-frequency traders have engaged in “electronic front-running,” “spoofing” and other schemes that manipulated the U.S. securities markets to the detriment of class plaintiffs.

It also alleged that the ...