What Is Front-Running Trading?
The Securities and Exchange Commission, commonly referred to as the SEC, is tasked with the protection of investors and regulation of financial markets.
Investment fraud can harm not only investors but the public, depending on the type of securities violation in question. Front-running trading is a form of market manipulation, and the penalties for traders who choose to engage in such fraudulent activities are severe. Read on to learn more about front-running trading.
Front Running Explained
Front running, also known as tailgating, is like a combination of stock manipulation and insider trading. An investor or trader acting on behalf of an investor buys a stock based on confidential information that there is a pending transaction that will greatly influence the price of the stock.
Whether the price of the stock goes up or down is irrelevant—trading based on insider information is illegal in every regard unless the information informing the trade either was made public prior to the trade or the decision to trade was not based on the confidential information given to the investor.
Securing a Whistleblower Reward
Any form of stock manipulation is illegal, and when you have information that can help protect investors from practices like front-running trading, it is critical that you come forward to the SEC. Not only is it the right thing to do, but the SEC is prepared to reward those who are able to assist the commission in its investigations into securities violations handsomely.
To receive an award, you must make sure your tip meets several requirements, which include the following:
- Your tip must be given voluntarily.
- The information you provide must be original.
- The SEC needs to be able to take enforceable action.
- Recovered sanctions will need to exceed $1,000,000.
If your tip about front-running trading meets the above requirements, you could be entitled to up to 30 percent of the SEC’s recovered sanctions, depending on how valuable your tip was to the success of the case.
Contact a Securities Fraud Whistleblower Lawyer
If you have information about potential front-running trading and you’re prepared to take steps to become a whistleblower, reach out to a qualified securities fraud whistleblower lawyer with Meissner Associates. We can help you submit your tip confidentially and avoid retaliation.
You can set up your no-obligation tip evaluation by giving our office a call at 1-866-764-3100 or completing the contact form below.